OFFICIAL MAGAZINE OF REAL ESTATE REGULATORY AGENCY

October 2009 Dh 10

GET REAL AT CITYSCAPE

Owners Associations

Page 3 Page 6

PERSONALITY

Ahmed Al Hamdani Page 7

ARELLO R.E. Licence Law Officials

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Message f r om t he CEO

Eng. Marwan Bin Ghalita

OFFICIAL MAGAZINE OF REAL ESTATE REGULATORY AGENCY

RERA neither takes responsibility nor accredits any studies, research or statistics that are not issued by it.

Another success is added to our beautiful Dubai. This success is Dubai Metro; a visionary project which is now up and running, connecting the city with its communities in a smooth first class ride. More than one million passengers have ridden on the Dubai Metro during the first three weeks of its launch, official figures show to be precise, 1,018,030 people travelled between the 10 stations on the Red Line during this period.

I like the slogan used by RTA, Roads and Transport Authority, when they promote the metro as “My City, My Metro”. Yes, I strongly believe that the Metro will shape the future of the city and will take the place of the creek, which has been the heart of the city for so long.

As the creek drew traders and residents to its heart, so the new rail transport system will draw workers, residents and tourists to the many interesting places that this expanding city has become. Old and new destinations will benefit, both commercially and as attractions. Dubai is opening up further to its fans.

The Metro will affect all kinds of business in our Dubai and the real estate sector will gain a lot from this project. Let’s take the ride and see how Our Metro is shaping and adding value to the real estate map.

Our metro...

MANAGING EDITOR K Raveendran ravi@sterlingp.ae

MANAGING DIRECTOR Sankaranarayanan sankar@sterlingp.ae

GENERAL MANAGER Radhika Natu radhika@sterlingp.ae

EDITOR Linda Benbow linda@sterlingp.ae

CONTRIBuTING EDITORS Ambily Vijaykumar ambily@sterlingp.aeVanit Sethi vanit@sterlingp.aeManju Ramanan manju@sterlingp.ae

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Account Manager Peter Macwan peter@sterlingp.ae

Accounts & Administration Biju Varghese biju@sterlingp.ae

Circulation Supervisor

Ibrahim A. Hameed

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CONTENTS

3 Owners Associations The shape of things to come 6 Personality Ahmed Al Hamdani7 Event Welcome to ARELLO8 Valuation Land valuations 9 Taqyeem Draft regulations10 Statistics August figures18 Environment A need for standards20 Market Trends & Analysis Attracting investments The next frontier27 Comments End users take centrestage A welcome move Negotiating the real estate transition LED lighting Walking around34 Community Charity time37 Interview Scope for timeshare38 Focus Do it yourself JLT free zone simplifies procedures Building safely Improvise and innovative47 Under Construction Projects on course49 Handovers Ahead of 2010 deadline50 Infrastructure unbundling electricity supply52 Interview Conveyancing services57 Legally Speaking Cancellation of projects Renewal of the property market60 Law Law 7 of 2006

9 Taqyeem Draft regulations

12 Cover Story

GET REAL AT CITYSCAPE

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It has been one of the most talk-ed about regulation in recent times and it is being awaited with a lot of hope from home

owners and developers alike who will now know what their rights are with regard to the upkeep and maintenance of their properties.

The regulations to the 2007 Law No. 27 concerning Ownership of Jointly Owned Properties in Dubai is done and is “awaiting management approval” according to Ahmed Khalil Al Hamdani, who is in-charge of the Owner’s Association Section at RERA.

The JOP Law introduced in 2007 has been the source of much con-troversy with neither owners nor developers clear about who is re-sponsible for maintaining a prop-erty. What then are the key features of the proposed amendments?

The JOP Regulations are ex-

OWNERS ASSOCIATIONS

Empowering home ownersLicensed management companies to be introduced to assist home owners mange properties

By Ambily Vijaykumar

pected to give more rights to the end users by means of empowering them to decide how their proper-ties will be maintained. The aim is to give the association the power to make their own decisions, have their own rights and responsibilities and also explain what their relation with the developer would be in this regard. With developers having to register a home owners association with RERA within six months of the introduction of the JOP Regulations, the owners association then has to elect a board within three months of the registration. The home owners Ahmed Khalil Al Hamdani

To coincide with the introduction of regulations to manage home owners associations and developers, RERA is also introducing management companies into the picture. These management companies will be RERA approved and will work under the supervision of the home owners’ association

association software that has been developed by RERA is aptly titled ‘Mollak’ (Arabic for ‘owner’).

“The JOP Regulations will explain what the process will be to register the home owners’ association. And once that registration is done, the JOP Regulations will also explain what powers they have. The elec-tion of the board members of the association would be an annual pro-cess and the guidelines for election would be explained by the JOP Reg-ulations,” informs Ahmed Hamdani.

RERA is expecting a flurry of reg-istrations for the home owners’ as-sociation once the JOP Regulations

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are out. When asked about what the fees for registration would be, all RERA was willing to say is that “registration is a fee and that needs to be shelled out”. What can be said though is that the proposed fee is very reasonable taking into account the current market conditions.

To coincide with the introduc-tion of regulations to manage home owners associations and developers, RERA is also introducing manage-ment companies into the picture. These management companies will be RERA approved and will work under the supervision of the home owners’ association. The JOP Regu-lations will also clarify the process for new licenses for these companies. The aim of RERA is then to be able to regulate not just the developers, but also the home owners’ association and the management companies.

“It will be a huge task. And with the large number of associations, they will need the help of manage-ment companies. That is why we thought that this is the right time to introduce new licenses for manage-ment companies so that we can bet-ter regulate them,” says Ahmed.

With home owners “not fully equipped” with the knowhow of managing a building, management companies that will come into the picture will put a plan or strategy in place keeping in line with the re-quirement of the home owners for the upkeep of the property.

In line with the constant educa-tion of real estate brokers, the board members of the owners association as well as the management compa-nies will have to undergo compul-sory training to be able to work as recognized entities.

“When management companies from outside Dubai set up business here, they need to be oriented to the functioning and the needs of the market here. So training is very essential for them to be aware of the rules and regulations of this market. The same holds true for owners’ associations. Unless you know the law, you cannot run the show. You need to have the knowledge to be able to address grievances,” explains Ahmed Hamdani. The thrust of the education RERA says will be on edu-cating the companies to manage a

community. But who decides which man-

agement company should be em-ployed for maintaining a building? “It is ideally the developer who will choose the management company. This will happen alongside the reg-istration of the owners association. Within three months of registration, the board members will be elected to whom the developers will pass on the complete contractual authori-ties for the running of the building,” informs Ahmed Hamdani.

However, the JOP Regulations allow the owners association the right to terminate the management agreement after the first year to en-sure that the management compa-ny is performing its obligations in a proper manner. While the new law will introduce new licenses for man-agement companies, the onus will also lie on them to employ service providers with proper licenses.

What if the home owners’ as-sociation then is unhappy with the functioning of the management company for the one year that they are employed? To this RERA says that for the management company to stay in business, they will auto-matically have to raise their service standards and ensure that the ser-vice companies that they employ meet the stringent standard de-manded by the home owners.

When asked whether the in-troduction of the management companies will add to the financial burden of the upkeep of buildings, Ahmed Hamdani says, “What is the use if the owners’ association is unable to maintain a building. It is not just about individual owners; it is about managing a community. Moreover there is a need to bring professionalism into the market. All over the world, management companies undertake the task of maintaining buildings under the supervision of Home Owners’ As-sociations.”

The contract for these main-tenance companies will then be awarded on a performance basis, a clause, RERA says will enable them to give the best services.

Coming to the costs, while the training of the owners association will be borne by the home owners

“When management companies from outside Dubai set up business here, they need to be oriented to the functioning and the needs of the market here...”

there is still lack of clarity on who pays to register with RERA. Service charges have also been in news for the wrong reason. RERA considers as one of its achievements for put-ting a stop on independent service charge increase by developers. The new rule now makes it mandatory for developers to get a RERA ap-proval to be able to do so.

“The home owners will have the right to decide the budget and the service charge. What needs to be understood is that home owners need to add value to the building so that other people are interested in the property. So it is not about the charge that you incur per square foot, it is about utilities and other

facilities and about maintaining a community. People require addi-tional things and that comes at a cost,” elaborates Ahmed Hamdani.

Prior to the formulation of the amendments, RERA said it has been holding dialogues with various de-velopers and home owners to arrive at a suitable solution that works to everybody’s advantage. The result, says RERA, has been that despite the law not being in force, many devel-opers have gone ahead and formed interim associations.

“Developers have realized that it is not possible for them to single handedly run a development with-out involving the owners,” says Ahmed Hamdani.

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He is the one man army heading the Owners Association section at RERA. Twenty eight year

old Ahmed Khalil Al Hamdani, how-ever, says that with the regulations on the JOP Law awaiting a final nod from the higher-ups, his efforts over the last eight months will bear fruit once the regulations are out.

Ahmed is guided by a group of legal experts who have been assist-ing him in researching for formulat-ing the regulations that have been at the centre of much debate in the real estate market in Dubai. So how has he coped with the pressure of performing a task that has been in the news for a very long time?

“I prefer to not let the pressure get to me. My task has also been made easier by the fact that the management has given me all the support and guidance necessary. The head of my department, the General Manager Land Depart-ment and the CEO at RERA have had complete faith in me. Even with the knowledge and experi-ence they have, they entrusted me with the task of researching. They would seek my opinion in several matters and that really boosted my morale,” says Ahmed.

Currently pursuing a degree in information technology, Ahmed juggles between work, college and family. But he says that he has given his heart and soul to his work even if that has meant listening to griev-ances.

“When someone listens to you, it is the first step to relief. My stint with RERA has brought me face to face with several homeowners, in-

PERSONALITY

Positively speakingAhmed Khalil Al Hamdani says new regulations for owners associations will bring transparency to the real estate sectorBy Ambily Vijaykumar

vestors and developers who come to us for a remedy to their prob-lems. That has helped me better understand what would work out for the best interest of all those who are involved. This has gone a long way in helping me with framing the regulations for the JOP Law,” Ahmed says.

What has also helped Ahmed with his task is his background in In-formation Technology. He says he is able to work with the IT department at RERA in developing the software, named Mollak, that will be used for the registration of the owner’s as-sociation.

During his stint with RERA, Ahmed says he has had several mo-ments that he is proud of; one of them being the time when he was instrumental in putting a stop on the hike in service charges for vari-ous developments. He says being a part of the regulatory body and also being able to formulate rules and regulations that guide the real es-tate market is another feather in his

cap. Most recently he was involved in the formation of the Middle East Facilities Management Association.

“What people don’t understand is that RERA is absorbing all com-plaints from all quarters and is us-ing that as an input while formulat-ing the laws so that things work in the best interest of everyone in the industry,” Ahmed states.

That is also one of the reasons why his department has an open office where people can walk in and address their problems. Ahmed says he makes sure that even if he has a prior meeting fixed, he takes time out for complainants who have taken the effort to address their issues to RERA. “The very fact that people are coming to RERA shows they still have faith in the Dubai market and that is a positive signal,” he elaborates.

For a person whose day begins at six in the morning and extends to well beyond midnight, his stint with HSBC’s customer service de-partment has helped him deal with

his present job better. “I like being friendly with people. It is the only way to win their trust. Especially when you know that the market has suffered a jolt, it is your duty to make sure that, as a regulator, you go that extra distance to win peo-ple’s trust,” Ahmed says.

Surrendering to a difficult situa-tion is also not Ahmed’s character-istic. His constant interaction with people in the industry has brought him into the good books of devel-opers and owners and he says that his association with them has gone beyond official.

“I get a lot of inputs from owners and developers in connection with the regulations. I have tried to im-bibe the best of all the inputs while formulating these regulations,” he says.

Ahmed is waiting for the new regulation to be out so that he can get the reaction not only from the market but also from his top man-agement who have put their trust in him.

He is equally confident of the real estate sector in Dubai returning to boom days once the regulations help in bringing transparency into the system. Ahmed however says that it is time for the entire sector to know and abide by the law and work in accordance with the gov-ernment perspective so that Dubai maintains the trust of its investors.

On a personal level, he is keen to give himself a much-needed break sometime next year on an island with his family. But till then, he is toiling to ensure that RERA’s new set of rules help to guide the real estate market towards a stronger future.

Ahmed Khalil Al Hamdani

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RERA to host Association of Real Estate Licence Law Officials Conference

The Real Estate Regulatory Agency (RERA), under the guise of Chief Executive Officer Eng. Marwan bin

Ghalita, is hosting a conference of the international arm of the Asso-ciation of Real Estate Licence Law Officials (ARELLO) on 4-5 October 2009. ARELLO is a US-based as-sociation of real estate regulators from various jurisdictions across the world who meet regularly to discuss regulatory issues, advance-ments of education, training and li-censing of real estate practitioners, and various means of cooperation.

As host to ARELLO’s first interna-tional conference since 2005, RERA and its international relations team headed by Eng. Mahmoud El Burai are pleased to welcome confer-ence guests from several different

countries including America, Aus-tralia and South Africa, to Dubai. The conference will take place over two days, the first of which has been opened to a small group of participants from UAE–based companies to engage themselves with this unique group, and benefit from their knowledge and exper-tise as well as offer a private-sector perspective to the discussions.

While RERA looks forward to welcoming its guests to Dubai for the first time, and showing them first-hand the successes of this emirate and its real estate mar-ket, as well as its advancements in regulatory and legislative frame-work, the goal of this conference is to foster discussion amongst ju-risdictions on topics ranging from the characteristics of a mature real

estate market to defining an inves-tor’s rights and responsibilities to uses of technology in real estate regulation. The conference will also feature a special roundtable brainstorming session between RERA’s directors and ARELLO ex-ecutives.

About this conference, Markus Giebel Chief Executive of Deyaar Development commented, “At Deyaar, we applaud and welcome this initiative to bring together real estate experts and professionals from around the world under one roof at a time when the industry at large is looking for new ideas. I am sure the real estate sector in Dubai will benefit immensely from this initiative, while drawing on the experiences of our international counterparts in finding innova-

tive solutions to the challenges at hand.”

The conference will host a compilation of prestigious speak-ers including an opening welcome address by Eng. Marwan bin Gha-lita, a talk about the role of media in changing economic times by Her Excellency Ms. Najla al Awadhi Deputy CEO Dubai Media Inc and FNC Member, Mr. Habib Bittar from Dubai Islamic Bank, Mr. Markus Giebel CEO of Deyaar, and others.

Given the event’s close prox-imity to Cityscape Dubai, RERA is pleased to announce that several guests are extending their stay in our Emirate in order to attend this event in its full glory. Deyaar is the Diamond Corporate Sponsor to this conference, and emirates is the official air carrier for the event.

RERA has launched a new four-tiered, colour-coded classification system for real estate broker licences.

Under the system will each broker will be registered with one of the four types of licences that will au-thorise them to sell a particular type of property within a specified area.

Yousef Al Hashemi, Director of Licensing, said: "This initiative is the next major landmark in the process of safeguarding property buyers, owners and investors' interests by consolidating the rigour, account-ability and transparency that is so crucial to the market. RERA has been introducing regulations step by step as required and where it can be most effective."

“We began the process with ini-tiatives such as escrow accounts and

New classification scheme for brokers

regulating brokerage sales by intro-ducing registration for brokers with a strict system for qualification and training and a scale of penalties,” he added. "These initiatives emerged after consultation with profession-als within the industry. Previously, RERA-had recommended that only registered brokers should be used and had taken steps to ensure they

were properly qualified to carry out their duties professionally. To-day, we have moved to the next stage. Now, only brokers with the appropriate licences will be able to act as agents in buying and selling specific types of property. This is a huge step in the right direction," Al Hashemi added.

The new colour-coded clas-sification allows tier one brokers, those issued with a blue licence by the Department of Economic Development (DED) and registered with RERA, to carry on all types of broker activities and operate throughout the emirate. They can operate within free zones if au-thorized to do so by the relevant authority. These have the widest sphere of operation.

The next step down from the tier

one 'blue' brokers are the yellow licensees. These will be licensed by the appropriate free-zone au-thorities to carry out the full range of brokerage activities but will be registered to operate only within designated freehold areas owned by that authority. If an authority does not own freehold real estate it will not be entitled to issue li-cences and any broker with such a licence from such a free zone will not be registered by RERA.

Tier three registered brokers- green licence holders-will be au-thorised to sell only the properties of specific companies or develop-ers.

Tier four licensed brokers are those issued with a red licence, authorized only to promote, sell or rent time share units.

Yousef Al Hashemi

NEWS

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VALUATION

International real estate invest-ments (cross-border invest-ments) put pressure on real es-tate valuers to respond to the

demand for reliable valuations to support the efficiency and transpar-ency of real estate property mar-kets.

In everyday language, the word reliable used to define one char-acteristic of a machine, a system, a product, and/or even a person in the meaning of trustworthy or de-pendable. The term ‘reliability’ has a strong connection to the term ‘qual-ity’ and they cannot exist separately. They are strongly connected to the extent that any unreliable organisa-tion, system or process cannot pro-duce a competitive product with high quality.

For the product to be reliable, all individual components (mechani-cal, information, and human) must be fully evaluated under all service conditions. Any failure of any one component will cause product fail-ure, which means that the reliability of the whole system can rely on a very small component. Hence, all components must be 100 per cent reliable and some of them may be duplicated to increase the safety factor (i.e. in flight work systems).

Valuation is an economic con-cept and is the process of estimat-ing the likely market price of a prop-erty if it is sold. To approach to land value, valuers follow a system with several components that depends on different processes.

A great deal of literature exists connecting the reliability of valua-tion (the output) to the certainty of

Reliability of land valuationsBy Mouaiad AL-Omari Real Estate Appraisal Centre Project Manager, RERA

one of three main factors: Firstly the valuer (behaviour, skills, and knowl-edge) as the responsible person for deciding the last value; secondly, data (efficiency, reliability, and availability); and thirdly, valuation methods.

The valuer is One of the main re-sources of the valuation process is the human valuer. The valuer is a human being with his own character traits influenced by culture, behaviour, needs, convictions, precepts, tenden-cies, and so on; and, as well, there are no two persons that have the same way of thinking and of interpreting the available information. Therefore, it is normal that each valuer has his own interpretation of the status sub-ject to be valued. Differences could arise even between professionals us-ing accurate data and implementing modern methodologies.

Although the valuer is one of the most important factors that enhance system reliability, the valuer "exists as a conduit through which the avail-able information can flow" (Brown 1985a, 1985b cited in Keogh, G. and D'Arcy, E., 1999: p. 2405). Therefore, he must not be considered as a super-man, but rather he is an interpreter to what already exists and must not take the whole issue alone on his own shoulders (Joslin, A., 2005).

After market recession in the USA, Germany, Japan, and the UK, these countries and many others (e.g. the Philippines, Malaysia, and Sweden) have realised that judgments should be based on accurate and reliable valuations that depend upon good quality data (Rowley S. et al., 1996). The sales comparison approach is considered to be most reliable way

to estimate land value, if a reliable data is available.

Issac, D. and Steley, T. (1999) ar-gue that it is not easy to use the tra-ditional valuation methods in prop-erties such as shopping centres, office buildings or over-rented ones as they are inflexible, so alternative approaches are needed. They add that one of the main causes of the German property market collapse in 1994 was the poor valuation methods. Johnson T.A. et al. (2000) to some extent agreed with Issac and Steley and stated that to reach an accurate valuation, the selection of valuation methods is important. Pomerleono, M. (2002) argues that in order to reduce risks in prop-erty transactions, valuers should

is needed for a sound infrastructure of the valuation profession (Sopon P. 2006).

Another important factor which is the umbrella of the previous fac-tors is the legal framework. Mal-linson (1994) in his response to the general criticism after the property crash in the UK of the late 1980s stresses in his report that effectively regulated framework is necessary for valuers to achieve valuation credibility. He added that reliability depends on the use of appropriate valuation bases (Market Value, Mar-ket Rent, Depreciated Replacement Cost, and Value of Plant and Ma-chinery to the business (see French N. 2003)) with supporting evidence and accurate and consistent results

Mouaiad AL-Omari

base their valuation on a standard method.

Moreover In his attempt to draw a roadmap of valuation infrastruc-ture in developing countries, So-pons (2006) asked specific ques-tions to a number of international leaders in the valuation profession (for the list of leaders see Sopon, P. 2006 Appendix I). Sopons con-cluded that methodology of valu-ation is one of the main factors that

(Parland C. et al., 2000).As land valuation is a system

with several components and has its own process to approach land value, hence we can’t reach reli-able valuations unless the whole system is reliable. Therefore, we should make sure that the land val-uation system components, which are the inputs, constraints, and re-sources are reliable. (To be continued…)

Reliable land valuations depends upon reliable land valuation system components

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Every day as I walk through the corridors of RERA and the Land Department, I get asked the same ques-

tion! After we’re done with the usual pleasantries, everyone wants to know: “Mohamad, when will the new valuation Regulations come out?”. Unfortunately as we’re still not ready to issue the Regulations I wanted to use this space to give you a sneak preview on what they might contain.

The Regulations will be based on Dubai Law number 7 for 2006 and will legally establish the frame-work for Taqyeem to regulate the valuation profession. All property valuation professionals will have to be registered with Taqyeem before they can issue valuation reports. Registration will consist of two stag-es that each need to be completed before an entity is legally registered. The first stage of registration is for companies and the second stage of registration is for individuals.

Company registration is all about Taqyeem getting to know each company in the market. We will re-quire the name of a senior person or director in that company respon-sible for valuations. That person will be our main point of contact with that company. Registered directors will be informed of the new Regu-lations and we will liaise with them

New valuation regulations-A sneak previewBy Mohamad Khodr Al-Dah, Head of Taqyeem (Real Estate Appraisal Centre)

The Regulations will be based on Dubai Law number 7 for 2006 and will legally establish the framework for Taqyeem to regulate the valuation profession

to ensure that the appropriate level of Professional Indemnity (PI) insur-ance is there. We hope that this registration will help these direc-tors to ensure that their staff con-tinue to work within the law and to the highest professional standards. Registered companies will be is-

sued with an updated trade licence via the Department of Economic Development listing them as prop-erty valuers as appropriate.

Individual registration is the second stage and will be our fo-cus. We will ensure that only quali-fied and experienced professionals

are allowed to conduct property valuations. Aspiring valuers will be required to attend a short course to explain the new Regulations. There are also plans for a mentoring scheme to welcome less-experi-enced people into the profession.

The Regulations will require that all valuation reports are done in accordance with the International Valuation Standards (IVSC) or other suitable approved standards. Valu-ers will be expected to adhere to a Code of Ethics and avoid conflicts of interest. Areas measured should be as per the Code of Measurement Practice, which was featured in the September 2009 issue of Real Times. All reports issued by the valuer should have two registration num-bers on it (one for the valuation company and one for the individual valuer) as this will guarantee full ac-countability to the end user of the valuation. Information systems will be developed to link individual re-ports back to Taqyeem. The Regula-tions also list the penalties in case of offences.

Everyone here at RERA and DLD hopes that these Regulations, once published, will offer the market re-newed confidence. It’s also worth noting that the contents of the of-ficial Regulations once published might be different from the con-tents of this article.

Mohamad Khodr Al-Dah

TAQYEEM

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More mortgages issuedValue of mortgages in Dubai top Dh8 billion during the second quarter of 2009, reports REIDIN.com

The value of mortgages is-sued in Dubai topped Dh8 billion during the second quarter of 2009 compared

to Dh7 billion in the previous quar-ter, according to DUBAIFocus, a product by REIDIN.com in part-nership with RERA & Dubai Land Department. REIDIN.com is the world’s first online information company focusing on real estate markets in the emerging countries. While the market is in a critical correction phase, where there is growing need for regulation and transparency within the industry, governments are taking steps to encourage stabilisation in terms of property prices and investor con-fidence and thus open up growth opportunities for the mortgage industry.

Statistics from DUBAIFocus re-vealed that 39 banks registered 1,365 mortgages in Dubai during the second quarter of 2009. Abu Dhabi Commercial Bank (ADCB) extended mortgages worth Dh1.86 billion, from the 91 transactions it undertook within the three month period. This was followed by Dubai Islamic Bank (DIB), which has regis-tered close to Dh1.83 billion from its 151 transactions, while the National Bank of Dubai (NBD) financed over Dh1.07 billion in mortgage loans in a total of 80 transactions finalised in the previous quarter.

“At present, the UAE is witness-ing a downward correction in loan-to-value ratios as the market dy-namics continue to shift, thereby making the Dubai property market more accommodating to buyers

and end-users,” said Ahmet Kay-han, CEO, REIDIN.com. “With more banks offering competitive lending ratio, especially during this eco-nomic downturn, it is no surprise that Dubai’s mortgage market has amounted to such staggering value despite the slowdown. The infor-mation from DUBAIFocus establish-es a positive trend for the mortgage market, among other data that can provide valuable insights to guide users in making informed deci-sions.”

DUBAIFocus is the most detailed and up-to-date information source on real estate investment deals for the Dubai market based on a com-prehensive database going back to 1973. It also incorporates time-saving functions such as heat maps, graphing facilities and customised chart and analysis tools.

In addition to DUBAIFocus, REI-

DIN.com also offers products including IN-DEXFocus, RETAILFocus and REBIS (Real Estate Business Information Service). The data and information used in RE-BIS, which are collected from various differ-

ent sources - including newspapers, newswires, maga-zines, research houses, financial in-stitutions, real estate agents, legal firms, municipalities, government institutions, and consultants - are structured by REIDIN.com research and data management team into intelligence and disseminated via

its website and email newsletters.“Our product portfolio is the

result of our commitment to deliv-ering accurate and up-to-date in-dustry information on the local and regional real estate markets, to give industry players a precise overview of the current situation and there-fore help them make the right de-cision. To date, we have launched four products, which address the specific needs of our customers. We are working towards further devel-oping and implementing various new features in all our products, in line with our aims to help custom-ers through accurate and relevant industry data,” concluded Kayhan.

Mortgage values post Dh1 billion growth versus first quarter numbers

To cater to the specific demands of Dubai’s

booming property market, REIDIN.com has

teamed up with the Dubai Land Department

to establish DUBAIFocus, the first exclusive

online information product tracking real

estate deals and transactions in Dubai.

DUBAIFocus – which has data from the year

1973 - provides daily information on all types

of land, villa and flat deals (sales, mortgage,

lease, grant, inheritance, etc.) in Dubai.

Ahmet Kayhan

STATISTICS

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Cityscape//COVER STORY

It is the time for getting real – both in terms of tackling the real estate market scenario in Dubai as well as combating global

warming issues. While worldwide economic upheaval plus a radical shake out in the regional investment landscape shall make Cityscape Dubai 2009 (5-8 October) a very important real estate event, answer-ing to the global green clarion call is Dubai Municipality that has decided to increase its green areas to match with its rapid development.

In terms of the real estate, scholar, investor and author Dr Christopher M. Davidson, who is a keynote speaker at Cityscape Dubai con-ference states, “With tumultuous international circumstances having taken their toll on the Middle East’s most liberalised economy, now is the time to focus on reality and the opportunities that still exist in Dubai. There’s no escape from the fact that this year we will be meeting under very different circumstances.” David-son is the author of Dubai :The Vul-nerability of Success . Though times

GETTING REAL

As Cityscape Dubai 2009 focuses on transparent real estate dealings, Dubai Municipality adds more green cover to the emirate

of volatility will eventually be over, Davidson believes that the growth and vision that has accompanied the rise of this astonishing city is “nothing short of phenomenal.” And that the same energy will find a way forward, paving the way for Dubai’s next chapter.

Cityscape Dubai 2009, now in its eighth year and part of the largest business-to-business real estate in-vestment and development brand in the world, encompasses a major exhibition and a series of confer-

ences taking place at the Dubai International Exhibition and Con-vention Centre. Davidson will give a keynote address – 2010: Can Dubai weather the storm? – on the open-ing day of the main conference. The speaker line-up for the confer-ence brings together some of the world’s most powerful investors, developers and economists for five days of discussion on the global real estate market. Included among them is Donald Trump Junior, Presi-dent of the Trump Organisation who shall speak on Dubai: Why it is a long term investment for us.

In 2008, the Cityscape Dubai attracted 80,297 participants and 954 exhibitors. “Clearly, while it is still far too early to make accurate forecasts, we are not anticipating the same level of participation,” said Chris Speller, Cityscape Group Director. “Like the rest of the world, the real estate investment business in Dubai and the region has had a reality check,” Speller added. “We are now seeing the emergence of more measured, more transparent

business models. While considered decisions may take away some of the market dynamism, that is prob-ably no bad thing at this present time. “With a return to real market values the event will return to its roots free from amateur investors and speculators.”

Alongside the main Cityscape Dubai event is the World Architec-tural Congress from 5 – 7 October at which some of the world’s most respected architects and vision-aries will share with their experi-ences and outlook on architecture in a global recession. The Cityscape Dubai Facilities and Asset Manage-ment Conference is on 4 – 8 Oc-tober attracting delegates in the design, build and post-occupancy of buildings. There will also be a Cityscape Dubai ‘Green Day’ on 7 October which will include green communities, green construction methods, energy saving issues, financing green buildings, regula-tions, facilities management, whole life costs and new materials and products.

Dr Christopher M. Davidson

Properties available in UAE Oman Cyprus Eygpt Greece Lebanon London Montreal-Canada USA

sale & leasing of commercial and residential propertyprojects - sales & marketing | developer representation

With over 30 years experience in the real estate industryChoueri Real Estate Broker (LLC) is among the region’s most professional firms

providing clients with unique insight into real estate opportunities.

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Cityscape Dubai Conference4-8 October 2009Sheikh Maktoum Hall5 October 09:00 - 19:30, 6 October 08:00 - 17:00, 7 October 09:00 - 16:15;8 October 10:00 - 14:00The Cityscape Dubai Conference will focus on global real estate investment and development issues, and will feature world class speakers and industry experts. You will have the opportunity to hear cutting edge strategies and discussions, aswell as crucial networking and benchmarking with your peers.

Facilities and Asset Management Conference4-8 October 2009Sheikh Maktoum Hall4 October Pre-Conference Workshop 08:30 – 16:00, 5 October 08:30 – 16:15, 6 October 08:30 – 17:00-7 October Understanding Facilities Management Day 18 October Understanding Facilities Management Day 2.The conference is the regions, premier gathering for Facilites Management professionals at all levels; the conference highlights the latest trends and technologies, their impact on Facilities Management practices and exam-ines new service offerings. It also provides the industry with a platform for debate and solution finding.

World Architecture Congress5-7 October 2009Sheikh Maktoum Hall5 October 08:30 – 16:15, 6 October 08:00 – 18:45-7 October Post-Conference Workshop 08:00 – 14:30An integral component of Cityscape – the World Architecture Congress draws-together the global leaders and brightest visionaries in architecture and design to discuss and debate the foremost challenges facing the built environment.

Last year’s World Architecture Congress @ Cityscape Dubai saw the be-ginning of what is going to go down in history as the First Great Depression of the 21st Century. With liquidity gone and project development on pause, architects around the world are asking themselves the same question, what can architecture practices do to survive the recession?

This year’s World Architecture Congress is not going to be about ground-breaking, out of this world creations but simply an event where architects and developers will discuss survival techniques in today’s rapidly changing economy.

The global downturn and cost cutting does not mean that this year’s event will lack in quality or expertise. On the contrary, this year’s event has been put together in Association with Continental Europe, Hong Kong, Ja-pan and UK Chapters and the International Committee of the AIA and it will feature a speaker panel unrivalled in the Middle East. Some of the world’s most respected architects and visionaries will share their experiences and outlook on architecture in a global recession.

Green Day7 October 2009Sheikh Maktoum A08:00 – 17:15The event is not just about “green buildings” – it will include green commu-nities, green construction methods, energy saving issues, financing green buildings, regulations, facilities management, whole life costs and new ma-terials and products. Green Day at Cityscape Dubai will be a focused one-day event which will be a sharing of ideas – no presentations, but intellec-tual discourse, which will take the subject forward.

Investor Round Tables5-8 October 2009Sharjah A5 October Hospitality/Tourism 10:30 – 11:30-Saudi Arabia 16:00 – 17:006 October Dubai 10:30 – 11:30, Abu Dhabi 15:00 – 17:00-7 October India 10:30 – 11:30-Asia 15:00 – 17:00, 8 October MENA vs Global Markets 10:30 – 11:30Investor & Developer Thank You Reception 12:30 – 13:00The Investor Round Tables are the latest addition to Cityscape’s growing portfolio, offering an exclusive opportunity for leading figures in real estate to discuss the key issues affecting real estate investment and development in emerging markets today. Admission to the Round Table sessions is strictly by invitation only and restricted to CEOs, MDs and other senior level indus-try leaders.

Cityscape Connect Sessions6-7 October 2009Sharjah D6 October Dubai Prices 10:30 – 11:30Market Transparency 11:30 – 12:00REITS 14:00 – 14:30-Retail 15:00 – 15:30, 7 October Home Finance & Mort-gages 10:30 – 11:00-Cost Cutting 11:30 – 12:00-Affordable Housing 14:00 – 14:30-Saudi Arabia 15:00 – 15:30In response to the overwhelming success and demand for recent Cityscape Connect. Business Breakfasts, this year there will be a number of not- for- profit, high value content sessions at Cityscape Dubai.

Cityscape Awards for Architecture6 October 2009 19:30 – 22:00Grand Hyatt DubaiThe most prestigious architectural awards platform from the emerging world underthe theme – Design for an Emerging World.

The awards will attract the world’s leading architects from the emerg-ing world as well as developers, consultants, governmental authorities and senior professionals involved in the industry.

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Cityscape’s ‘Environmental Partner'EEG offers expertise in sustainability and environment as Cityscape Dubai lays special focus on 'green' development

Emirates Environmental Group (EEG) has announced that it will participate as En-vironmental Partner in the

8th Cityscape Dubai, the world’s largest business-to-business prop-erty investment and development event. Cityscape Dubai is poised to leverage EEG’s environmental ex-pertise as the event, which will be held from October 5-8, 2009 at the Dubai International Exhibition Cen-tre, adopts a new focus on sustain-ability and environmental impact.

According to recent studies, GCC countries are expected to spend around $70 billion or around Dh 257 billion on energy projects this year to address the rapid growth in energy consumption all over the region. The UAE, in particular, has been posting a 10 per cent growth in average annual energy use, which has stimulated a growing concern for sustainability and green tech-nologies.

Habiba Al Marashi, Chairperson, EEG, said, “The massive real estate and construction activities across the GCC have greatly influenced the surge in energy consumption in the region. As such, it is clear that players in these key sectors will have an im-portant role in addressing both the present and future energy challeng-es of our society. In this regard, it is highly commendable that Cityscape Dubai has focused on more press-

ing issues concerning sustainabil-ity and the environment; the event will definitely serve as an excellent venue for all parties to discuss the challenges and opportunities that lie before us in our pursuit of long-term sustainable development.”

“Emirates Environmental Group will actively participate in the event to help provide invaluable support and guide participants to identify the right solutions, best practices and international trends that will add greater value to their energy conservation initiatives. Further-more, this event serves as a sig-nificant move forward in achieving our ultimate goal of preserving our precious natural resources and pro-tecting the environment,” added Al

Marashi.With over 500 exhibitors and

more than 30,000 professional visi-tors from over 100 countries expect-ed to attend the event, Cityscape Dubai offers an excellent opportu-nity for EEG to reach out to a much wider spectrum of industry players in its mission to create greater aware-ness about environmental issues, particularly in the area of energy conservation.

EEG is the first environmental NGO to be given the ISO 14001 cer-tification for its environmental man-

agement system. The group oper-ates in consonance with the UAE’s sustainable development plan and is actively encouraged and sup-ported by local and federal govern-ment agencies.

Cityscape Dubai is an annual networking exhibition and confer-ence focusing on all aspects of the real estate development cycle. The event comprises a large scale ex-hibition, conferences, awards cere-mony and gala dinner, networking cocktail party and numerous other special networking events.

The Emirates Environmental Group (EEG) is a voluntary, non-government organization (NGO) devoted to protecting the environment through means of education, action pro-

grammes and community involvement. EEG is actively encouraged and supported by concerned local and federal government agen-cies. It is the first environmental NGO in the world to be ISO 14001 certified and the only organization of its kind in the UAE with ac-credited status to the United Nations Convention to Combat De-sertification (UNCCD). In 2005 EEG was awarded accredited status to the United Nations Environment Programme (UNEP)’s Governing Council. It is also a member of the United Nations Global Compact and is a focal point for the Global Compact in the GCC States. EEG is also a member of the International Union for Conservation of Nature (IUCN). Emirates Environmental Group is open to men and women of all nationalities, as well as to public and private organiza-tions, academic establishments and international institutions.

The Emirates Environmental GroupHabiba Al Marashi, Chairperson, EEG

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“Cityscape Dubai is the world’s largest real estate development and investment event and by participating as Platinum sponsors for the Dubai exhibition, Tanmiyat is honouring its commitment to the region’s real estate sector – which in the long term will prove its strength and resilience”

A number of developers have decided to exhibit at this year’s event – showcasing their exist-

ing projects. Tanmiyat is the offi-cial Platinum sponsor of Cityscape Dubai 2009.

Dr. Wan Hasni, Advisor in Charge of Tanmiyat, said: “Tanmiyat has been one of the sponsors of City-scape Dubai since 2006, and de-spite the difficult year that the re-gion’s real estate sector has had, we believe it is important to continue being active and to participate in industry exhibitions. We need to keep communicating to sector spe-cialists and the public about where things stand – the sector was vocal during the peak times and it cer-tainly is just as important during the current financial crisis.”

“Cityscape Dubai is the world’s largest real estate development and investment event in and by participating as Platinum sponsors for the Dubai exhibition, Tanmiyat is honouring its commitment to the region’s real estate sector – which in the long term will prove its strength and resilience,” added Dr. Wan.

Tanmiyat’s stand at this year’s Cityscape exhibition will showcase and offer development updates on the firm’s prestigious $3 billion Aj-man Marina development and its renowned Living Legends project.

Rohan Marwaha, Managing Di-rector of Cityscape and Managing Director of IIR Saudi Arabia said: “This year has been a challeng-ing year for the real estate indus-try, but Tanmiyat is a testament to the strength of the sector. We are delighted to host Tanmiyat once again this year – I hope the event is as fruitful as it has been in the past and we look forward to work-ing with them for many years to come.”

Since its inception in 1982, Tan-

Participantsmiyat has been a pioneer for the region’s real estate development sector, utilising the industry's most skilled engineers, alongside highly creative architects and designers in order to develop its groundbreaking projects.

Union Properties (UP), a recipi-ent of the ‘Superbrands’ award for 2009 , will be exhibiting this year too.

Commenting on UP’s participa-tion, Mr. Khalid Al Jarwan, General Manager, Union Properties, said: “There is no doubt that Cityscape is one of world’s most recognized busi-ness to business real estate shows, it is a show we look forward to attend-ing every year. Our participation this year is a crucial step for further re-inforcing to the show visitors, even during turbulent times, our dedica-tion to delivering excellence and un-surpassed levels of quality through our unique portfolio of projects and development brands”.

UP will be showcasing its flag-ship project, the 38,000,000 square feet MotorCity development that includes residential, commercial and retail amenities and comprises five project components: • UpTownMotorCity

Green Community MotorCity•Business Park MotorCity •Dubai Autodrome•F1-X Dubai themed park •The company will also showcase

its unique DIFC projects; Index™ the

80-storey multi-purpose tower of-fering state-of- the-art offices for multinational corporations, mini-malist designed luxury apartments as well as retail offerings; and Lime-stone House the exclusive luxurious residential building that will con-nect to a five star hotel.

Mr. Al Jarwan also added: “The reputation that we achieved as a trusted developer for more than 20 years is something we are proud of today. Whether it’s offering high quality developments, flexible leas-ing and buying options, or deliver-ing projects on time, we want all our stakeholders, potential inves-tors, and customers to know that their satisfaction is the number one objective behind every action and decision we take”.

The UP stand will be located in Hall 4, stand number 4C20. A dedi-

Dr. Wan Hasni

cated sales team will be available on all four days for taking enquiries on the showcased projects; Index and Limestone House of which construction is progressing well for both projects with a confirmed date for completion and delivery by year-end. In addition to the unique MotorCity development to which UP is currently progressing with the handing over of the project’s two residential components; UPTOWN MotorCity and Green Community MotorCity.

MotorCity

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ENVIRONMENT

How did you first get in-volved with green buildings? I have been working within the con-struction sector for over 20 years. Previously I was Chairman and MD of a British company that later became a Honeywell subsidiary in India, and which was very active within the Confederation of Indian Industry (CII). As part of an initiative in the late 1990s by the CII to make Indian industry more competitive globally, I was asked to lead a National Com-mittee on Construction looking at promoting changes within the in-dustry. With this in mind we created a unit, the CII Green Business Centre, to drive corporations to focus on sustainability practices in regard to water, waste management, re-newable energy, conservation and green buildings. I was then invited to be the Founding Chairman of the Indian Green Building Council.

What is the World Green Building Council (WGBC), and your role within it?The WGBC is the global umbrella body for a rapidly-growing number of national green building councils worldwide. It was founded in 2002 to encourage more sustainable practices across the global construc-tion industry and to support the de-velopment of international green building rating systems. As Vice-Chairman, my role is to promote the concept of sustainability and efficiency within the green building sector. The ‘green movement’ has

A need for green standardsDubai Real Times spoke to Mr Parasu Raman R, Founding Vice-Chair of World Green Building Council and CEO of BMTC (Bahri & Mazroei Trading Company), a major UAE engineering solutions company/ supplier of electrical, water and lighting solutions to the construction industry in the UAE

quickly gained momentum; our member countries now represent 50 per cent of global building ac-tivity, and their councils work with more than 10,000 companies and organisations all over the world.

What challenges have you faced in getting the ‘green’ message across at the lo-cal level?When you drive change, whether for good or bad, you are usually faced with a series of challenges. Added to this, if initiatives are intangible, you will undoubtedly have more cynics than advocates. A major challenge has been to rectify the common misconception that ‘going green’ is an expensive, charitable thing

to do that requires sacrificing profit and comfort for the sake of cleaner living. This is far from the truth, as sustainability is economically viable in both the short and the long term. Globally however, the concept is still in its infancy, so we have to be per-sistent in promoting the ‘green’ way and clearly conveying the message that green building is not simply for the social good, but makes business sense too. Case studies of successful sustainable development projects are very important here, as they help to prove that green building design leads to a better environment, bet-ter human health for those who live and work in the buildings, and also provides substantial cost savings for developers.

What is the definition of a ‘green’ building and what standards are used to judge this?A green building is one that is de-signed, built and operated in an ecological and resource-efficient manner. Green buildings are de-signed to reduce the overall impact to the environment and focus on the key principles such as materi-als, indoor environmental quality, water, energy use and waste man-agement.

Internationally, there are many sets of standards being used to measure a building’s sustainability. The most popular voluntary rating system is the US-conceived LEED (Leadership in Energy and Environ-mental Design), which is now be-ing adopted by most other parts of the world. LEED looks at a number of areas that makes a building a holistic sustainable design, rather than merely an energy efficient one. Other major systems are the UK BREEAM and Australian Green Star. In the UAE, Dubai has so far followed LEED. However, following a decree issued by His Highness Sheikh Mohammed in October 2007, the Emirate will soon be intro-ducing its own comprehensive set of (mandatory) green building reg-ulations that have been formulated from reviewing over 250 interna-tional rating tools currently in use. This is the most historic global step forward in the area of sustainable design and will go a very long way

Parasu Raman R

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in setting the trend across the rest of the world. Abu Dhabi, on the other hand has developed its own volun-tary Pearl rating system as part of its Estidama ‘sustainability’ initiative. It is not yet evident which system the other emirates will follow.

Is it possible to set global standards of sustainability for the construction indus-try? Requirements change between climatic zones and to that extent standards will have to be adaptable, but in order to drive forward the concept of green building, an ac-ceptable benchmark is imperative. There appears to be some confu-sion today, which is certainly imped-ing progress. The various systems in use today vary from country to country and include different judg-ing criteria, but uniform elements that can therefore be applied at an international level include: I) the sustainability of site II) conservation of energy III) indoor environmental quality IV) water management V) material VI) design innovation

While I appreciate that generally every country desires its own sys-tem, my recommendation is to have one standard tool across the GCC. With climatic conditions reason-ably consistent and given that most building industry professionals work across the region, it would be diffi-cult for them to work with a differ-ent tool for each country. It should not be difficult to create a consen-sus-based GCC set of standards if all communities and governments work through the national Green Building Councils.

Is green building driven by environmental concern, or do you feel corporations are simply using it as a new marketing tool?There is an ever-increasing focus on environmental issues among all stakeholders. It is clear that the world can no longer afford to waste scarce resources such as energy and water, and so construction has had to move towards adopting more sustainable, efficient practices. In

several countries, such as those par-ticipating in the Global Reporting Ini-tiative (GRI), it is now compulsory for companies to report on matters such as their carbon footprint details and a series of social and environmental is-sues. However, many developers are now adopting sustainable practices even in the absence of legislation. While companies may be motivated to some degree by environmental concerns, ultimately green building has to make good business sense. The global real estate community has quickly recognised this potential economic value, in that green build-ings are more efficient and there-fore more attractive to potential investors. Therefore, sustainability is naturally a new marketing tool that makes sense for corporations to take advantage of if they wish to remain competitive.

For example, during the first year of operation a typical green building will save 35-40 per cent in energy costs, around 40-45 per cent in wa-ter, and about 90 per cent in waste management. This is proven from statistics in India, Australia and the US; the cost of power is lower here in the UAE, meaning an approximate power saving of 20-25 per cent.

Taking into account the U.A.E’s booming construc-tion industry, what do you feel is the role of ‘green building’ in the Emirates?While the concept is still relatively

new here in the UAE, there is no doubt the region is quickly catching up with countries such as India, Aus-tralia and the US, where sustainabil-ity is already well established. The green movement has steadily been gaining traction here; people are conscious that it is here to stay, and we have seen demand rising steadily for certain associated services such as green consulting and contracting. In the most successful markets that have managed rapid transformation, the local Green Building Council has played a key role, and since its establishment earlier this year, the Emirates Green Building Council has been very successful in advancing green principles within the UAE.

This region has been a booming construction hub for many years, and since there is already a high density of built-up space, in one way the no-tion of green building has arrived too late. Many developers did not include sustainable measures in their original designs and this lack of efficiency will continue to remain for quite a long time to come.

Having said this, the definition ’sustainability’ itself is constantly evolving as new technology is devel-oped, so by looking at the past we can also learn how to move forward. While it is possible to retrofit existing structures, it is far easier and less ex-pensive to concentrate on new build-ings. There is still a lot of construction planned in the UAE, and incorporat-ing better sustainable designs into

new buildings costs very little at the outset but can yield huge returns on investment. In this way, ‘green building’ should become an increas-ing focus for the real estate industry here in the region and should help to revitalise the market.

What will help the global green building movement continue to grow in the fu-ture?When looking at the various different models of green building councils worldwide, it is evident that in some places, governments play a bigger role than in others. Green practices are a matter of attitude, but it must be remembered that the construc-tion industry is a business which ex-ists to make money. From what we observe in best-practice economies, it is beneficial for governments to set minimum benchmarks of build-ing performance, to force the in-dustry to move from unsustainable consumption to more modest levels of sustainability. Thereafter, the gap between this standard and com-petitive excellence must be man-aged by the national Green Building Councils, supported by the WGBC, and market-led activity rather than through legislation. As the market rapidly develops, education will take place across all levels, and as a result, green building, which is still often viewed as simply something ‘good to know’, will become a business necessity.

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MARKET TRENDS & ANALYSIS

Jones Lang LaSalle has as-sessed that Abu Dhabi, Dubai, Cairo and Casablanca are best positioned within the MENA

region to create the competitive conditions required to attract more long term capital into their real estate markets over the next few years.

In a report titled ‘Race to Com-petitiveness: Preparing MENA Mar-kets for Long Term Investors’, JLL says the ability of different markets to attract long term regional and global investors will be of critical importance to their progression into the stabilization and recovery phases of their cycle as the empha-sis shifts from a short term to a lon-ger term investment paradigm.

Creating the right environment to attract long term investment into MENA real estate markets remains a work in progress. While few of the

UAE best positioned to attract investmentsJones Lang LaSalle says creating competitive conditions is vital for stability and recovery

necessary requirements have yet to be fully met, significant progress has certainly been made in many critical areas, the report points out.

In the rush to build and sell real estate assets, markets across the MENA region have largely over-looked the requirement to attract more stable, long term investors and end users over the last decade. The wholesale withdrawal of spec-ulators and short term investors over the past year has left many owners with the need to hold and reposition assets they had originally intended to transact quickly.

Compounding the challenges facing many existing owners is the fact that prices and rentals have declined by 25-50 per cent in some markets across the region and most markets have experienced a dra-matic downturn in the volume and size of real estate transactions.

Jones Lang LaSalle had predict-ed 2009 would be a year of correc-tion, with the markets moving into a stabilization phase in 2010, ahead of a recovery in 2011.

“While we expect to see a fur-ther consolidation in the real estate sector, with prices and rents con-tinuing to decline in some markets over the short term, the pace of correction is now easing as global and regional economic stability leads to an improvement in inves-tor sentiment. A key to the success of markets in this phase of the cycle will be their ability to attract long term regional and global invest-ment,” it said.

The report noted that this tran-sition will require a paradigm shift, from the previous reliance on short term strategies and rapid imple-mentation, to an increased focus

on the creation of quality real estate assets that will be attractive to both occupiers and long-term real estate investors.

Long Term InvestmentIn mature economies, long term investors (including private family groups, conglomerates, government entities, and institutional investors e.g. insurance companies, pension funds and listed real estate funds) account for around 80 per cent of large real estate investment transac-tions. These groups bring high vol-umes of relatively stable, long term capital to the real estate sector.

JLL has identified a range of cri-teria that these long term investors typically consider when assessing any potential real estate transac-tion. These criteria can be grouped together into three broad headings, ranging from the macro to the micro level, from market wide to asset spe-cific considerations:• Competitiveness of the invest-

ment environment• Realestatemarketconditions• Availabilityofinvestableproduct

The report points out that specu-lative investors tend to be relatively opportunistic in nature, attaching the greatest weighting to the third set of largely asset specific criteria. In contrast, long term institutional real estate investors tend to take a more ‘top down’ approach, beginning with the competitiveness of the economy and the real estate sector of any market, before moving on to

Dubai has made considerable progress since last year. There are no longer any red lights, with the market being characterised by a mix of amber and the emergence of a few green lights, suggesting progress has been made on all the factors and some have now seen recovery.

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Pulse • MENA House View • September 2009 5

Attractiveness of Selective MENA Markets for Long Term Investment

Leading Indicators

The following table summarises changes in a series of leading indicators of real estate market conditions in Dubai. This data is updated on a monthly basis and will be reported in future editions of this publication. For more detail on these indicators, contact our research team.

Indicator Current month Previous month Change

Economic Indicators

Oil price (Brent Crude) – 22/09/09 $70.79 $72.90 ▼

EIBOR (%) – 22/09/09 2.63 2.46 ▲

EUR:USD – 22/09/09 1.47 1.41 ▲

Real Estate Market Indicators

DFM real estate index 4,058 3,520 ▲

Value of registered property transactions (M-o-M Change %) 9% 24%

Number of registered property transactions (M-o-M Change %) -9% 17%

Value of construction tenders (existing and new) (millions) $42,700 $51,000 ▼

Value of projects cancelled/on hold (millions) $5,600 $50,000 ▼

Hotel & Tourism Indicators

Occupancy (Dubai – All Hotels) 68% 68%

Revenue Per Available Room (Dubai – All Hotels) $109 $111 ▼

Source: Various

Source: Jones Lang LaSalle

Conclusions – Which MENA markets are likely to attract the new breed of long term real estate investor?

As the economic storm passes we expect that real estate markets will move into a period of stabilisation in 2010 and recovery in 2011. A key component of this recovery will be the attraction of long term institutional investment into the real estate sector.

Some improvements have been made to creating a positive investment climate and improving overall competitiveness at the macro level. Progress has also been made in meeting the requirements for real estate market recovery in many markets across the region. The greatest remaining challenge is at the real estate industry level. Major changes are still required in the attitude of existing owners, to position their assets to make them more attractive to regional and global long term investors. These investors have an increased range of quality real estate assets to consider across both mature and emerging economies.

Having regard to the three sets of factors identified in this article, Jones Lang LaSalle has assessed that Abu Dhabi, Dubai, Cairo and Casablanca are best positioned to attract more long term regional and global investment into their real estate markets over the next 2-3 years.

While some of these Tier 1 markets may see a continued decline in short term performance, they are considered to offer the right combination of investment competitiveness, real estate market conditions and asset specific ingredients to attract long term investors.

A number of the cities that investors expect to record the strongest performing real estate markets over the next 12 months (e.g. Riyadh, Jeddah and Doha) are classified as Tier 2 cities in terms of their appeal to long term investors. However, their attractiveness is constrained by relatively high current pricing and the limited availability of investable product.

Pulse • MENA House View • September 2009 3

Requirements for Real Estate Recovery – Dubai

Oct 08 Mar 09 Oct 09

Macro Economics

Global economic stability • • •

Recovery in oil prices • • •

Stability in employment levels • • •

Financial/Liquidity

Decline in cost of capital (interest rate) • • •

Recovery in equity markets • • •

Recapitalization of banking sector • • •

Increased funding available to real estate sector • • •

Real Estate

Increasing occupier demand • • •

Reduction of future supply pipeline • • •

Stabilization of pricing levels • • •

Increasing transaction levels • • •

Consolidation of real estate participants • • •

Implementation of new investment paradigm • • •

Supporting Factors

Recovery in tourism • • •

Improved brand perception • • •

Improvement in corporate governance • • •

Concerted government action • • • • Required • Underway • Achieved

Source: Jones Lang LaSalle

Attracting Long Term Investment

In mature economies, long term investors (including private family groups, conglomerates, government entities, and institutional investors e.g. insurance companies, pension funds and listed real estate funds) account for around 80% of large real estate investment transactions. These groups bring high volumes of relatively stable, long term capital to the real estate sector.

Working with our colleagues in LaSalle Investment Management, we have identified a range of criteria that these long term investors typically consider when assessing any potential real estate transaction. These criteria can be grouped together into three broad headings, ranging from the macro to the micro level, from market wide to asset specific considerations.

• Competitiveness of the investment environment

• Real estate market conditions

• Availability of investable product

Speculative investors tend to be relatively opportunistic in nature, attaching the greatest weighting to the third set of largely asset specific criteria. In contrast, long term institutional real estate investors tend to take a more ‘top down’ approach, beginning with the competitiveness of the economy and the real estate sector of any market, before moving on to identify particular assets.

Building a Competitive Investment Environment

Before considering the specifics of the real estate markets

themselves, long term institutional investors will typically assess the broader macro economic and investment environment within which the real estate markets operate. The challenge here is for governments and regulators to build a transparent investment and business environment to encourage employment and population growth, which will then attract long term real estate investors.

The World Economic Forum (WEF) produces an annual report which scores cities based on a range of 110 such factors. In its recently released 2009/2010 report, the WEF notes the improvements in the overall competitiveness of markets across the MENA region. Eight countries (UAE, Qatar, Saudi Arabia, Tunisia, Oman, Bahrain, Kuwait, and Jordan) feature in the top 50 most competitive countries in the world; and three (Qatar, UAE, Saudi Arabia) in the top 30. These results reflect the vision and investment these governments have made to become competitive and more transparent.

Requirements for Real Estate Recovery

The second set of factors considered by long term investors relate more specifically to the real estate markets themselves. In our MENA House View (March 2009), Jones Lang LaSalle identified a series of 17 factors that will impact the timing of the recovery of real estate markets. The following table shows how Dubai, the region’s hardest hit real estate market, has improved in relation to these factors over the past 12 months. While definite progress has been made, creating the right environment to promote the recovery of the real estate market (and thereby attract more long term investment) clearly remains a ‘work in progress’.

However, Dubai has made considerable progress since last year. There are no longer any red lights, with the market being characterised by a mix of amber and the emergence of a few green lights, suggesting progress has been made on all the factors and some have now seen recovery achieved.

As would be expected, ‘leading indicators’ such as equity markets and energy prices have recovered first, with other indicators (e.g. employment and occupier demand) lagging behind. The real estate market is itself a lagged indicator and while we expect further declines in both values and rental levels to occur over the rest of 2009, the pace of decline is certainly easing.

identify particular assets.Before considering the specifics

of the real estate markets them-selves, long term institutional inves-tors will typically assess the broader macro economic and investment environment within which the real estate markets operate. The chal-lenge here is for governments and regulators to build a transparent investment and business environ-ment to encourage employment and population growth, which will then attract long term real estate investors, the report says.

The World Economic Forum (WEF) produces an annual report which scores cities based on a range of 110 such factors. In its re-cently released 2009/2010 report, the WEF notes the improvements in the overall competitiveness of mar-kets across the MENA region. Eight countries (UAE, Qatar, Saudi Arabia, Tunisia, Oman, Bahrain, Kuwait, and Jordan) feature in the top 50 most competitive countries in the world; and three (Qatar, UAE, Saudi Arabia) in the top 30. These results reflect the vision and investment these governments have made to be-come competitive and more trans-parent, it is pointed out.

The second set of factors consid-ered by long term investors relate more specifically to the real estate markets themselves. In its report MENA House View issued in March 2009, Jones Lang LaSalle identi-fied a series of 17 factors that will

impact the timing of the recovery of real estate markets. The report explained how Dubai, the region’s hardest hit real estate market, has improved in relation to these fac-tors over the past 12 months. While definite progress has been made, creating the right environment to promote the recovery of the real estate market (and thereby attract more long term investment) clearly remains a ‘work in progress’.

JLL notes that Dubai has made considerable progress since last year. There are no longer any red lights, with the market being char-acterized by a mix of amber and the emergence of a few green lights, suggesting progress has been made on all the factors and some have now seen recovery.

As would be expected, ‘leading indicators’ such as equity markets and energy prices have recovered first, with other indicators (e.g. em-ployment and occupier demand) lagging behind. The real estate market is itself a lagged indicator and while further declines may be expected in both values and rental levels to occur over the rest of 2009, the pace of decline is certainly eas-ing, it said.

Despite the improvement in sentiment and the emerging con-sensus that the Dubai market is through the worst of the crisis, one significant challenge remains – the potential oversupply that is emerg-ing in many sectors of the market.

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Vacancies in the office market are currently around 25 per cent and the average occupancy rate in the hotel market has fallen to around 65 per cent. The report notes that the oversupply situation is likely to get worse before it gets better in some sectors and this will con-tinue to place downward pressure on prices and rental levels in the short term. This is likely to lead to a ‘two tier’ investment market, with continued demand for those prop-erties that are well leased and pro-vide a secure income flow, while there will be little interest from long term investors in projects un-der construction or those suffering low occupancy levels.

JLL says the third set of factors required to attract long term inves-tors relate specifically to the real estate sector itself and the avail-ability (or otherwise) of investable quality real estate product.

Despite the dramatic correc-tion in pricing in markets like Dubai and the more subdued cor-rections elsewhere in the MENA region, selling has not proved to be easy and few major deals have occurred to date. Attracting long term investors into the market re-quires more than just competitive pricing. Existing owners must also

adopt a changed mindset, in line with the new (longer term) invest-ment paradigm.

With the majority of owners continuing to adopt a ‘wait and hold’ strategy in expectation of a future rebound, pricing is often still not in line with market expecta-tions, JLL points out. Even where pricing is competitive, assets are not being packaged in a way that provides the secure long term leas-es required to underpin the stable cash flow sought by investors.

Those owners that recognise the importance of securing qual-ity tenants on long term leases and implementing more proactive as-set and facility management pro-gramme will be those that succeed in selling their assets to the long term investors that are currently searching for opportunities.

Despite the common perception that there is an excess of stock on the market, JLL’s recent Real Estate Investor Sentiment Survey (com-pleted in September 2009) reveals there are actually currently more buyers than sellers for well priced commercial assets in most of the major MENA markets. Converting these potential buyers into actual deals will largely depend upon the extent to which existing owners are

prepared to meet the new market conditions in terms of not just pric-ing but also the structuring of their assets to make them attractive to longer term investors.

One of the major hurdles to cre-ating more investable product is the short term leases that continue to prevail across most markets in the MENA region. In this regard it is encouraging that average com-mercial leases in the Dubai market have increased from one to three years and that a number of owners of commercial premises are now openly talking about the prospect of offering tenants longer term leases (up to 10 years). This would make any asset much more attrac-tive and therefore saleable to the new breed of long term investors that the markets need to attract if they are to progress to the next level in their real estate maturity.

So what can existing owners do at the asset level to attract regional and international investors? The answer is to make products and portfolios investable, through a practical and realistic approach to the pricing, structuring, and oper-ating of their assets. The six key initiatives have been identified as:• PriceAdjustment:Ownersmust

recognise the true value of their assets in the face of current market trends, and price ac-cordingly.

• Stable Cash Flows: Ownersshould look to secure stable in-come for their operating assets. This may involve accepting lon-ger term leases than have tradi-tionally been offered.

• Asset Management: Ownersmust implement an asset and property management strat-egy which can considerably improve the value of the asset over the long run.

• Legal Structuring: Ownersshould make sure that the legal structure of the property is in line with international industry norms.

• Financial Structuring: Ownersshould make full use of future debt. The standard in the region has been toward full equity plays, and owners can increase the return and value of an asset by leveraging a healthy degree of debt.

• Restructuring/Adopting Longterm Portfolio Strategy: Owners must restructure and consoli-date their portfolios around a cohesive strategy which needs to have a long term-focus.

deyaar new.pdf 8/30/09 10:10:03 AM

deyaar new.pdf 8/30/09 10:10:03 AM

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MARKET TRENDS & ANALYSIS

After several years of un-precedented regional growth in the construc-tion sector, the real estate

market in most GCC countries is now faced with a large supply base of residential, commercial, hospitality and retail assets. As the rate of con-struction slows to adjust to the new market dynamics, businesses are shifting their focus from developing new assets and looking for ways to increase performances of the exist-ing ones. In an oversupplied market the winners will be those who can successfully extract maximum value from their existing assets and this will be found through the deployment of best practice operations.

“As development projects are completed, there is an opportunity for GCC developers to shift their fo-cus from ‘develop to sell’ to ‘develop,

The next frontierSeeking operational excellence in real estate and facilities management: the next frontier in a maturing real estate market

manage and collect’ business mod-els. This means they will need to look at the way they operate their exist-ing business units and identify op-portunities which will drive bottom line performance”, said Dr. Dirk Bu-chta, Senior Partner and Managing Director of A.T. Kearney in the Middle East. “For the real estate sector this requires an in-depth understand-ing of asset management, property management and facilities manage-ment businesses“.

The reality is that the manage-ment of real estate assets in the re-gion is often limited to poor quality reactionary led responses to repair needs with limited attention to pre-ventative maintenance. In addition to this the property management role, in most cases, is limited to ad-ministrative tasks. The average level of service in this sector in the UAE is

still generally regarded as poor and one of the key reasons for this is that the full scope of property manage-ment services and value remains widely misunderstood.

Asset Management is the finan-

cial management of a portfolio of real estate assets, with a focus on fi-nancial return and risk management through diversification, valuation, portfolio management and opti-mization as well as strategic Capital Expenditure planning.

Property Management focuses on the attraction of tenants and state of the art delivery of services to ten-ants. Its key objective is to maximize revenues from tenants and to mini-mise vacancies: operationally effec-tive property management is geared to capturing a greater ‘share of wal-let’ or ‘end user spend’. This focuses on delivering added value services to the end user - the most important point in the real estate value chain (a key point that was overlooked dur-ing the property ‘boom time’ in the GCC markets).

The regional market is still very

Dr. Dirk Buchta

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immature: there are some experi-enced global companies active in this segment such as CBRE, Colliers and Jones Lang Lasalle, as well as some regional players like Asteco and Arenco Real Estate, but they control only a limited proportion of the market and mostly on the com-mercial side. The property manage-ment, leasing and tenant manage-ment businesses generate healthy returns from 15 to 20 per cent.

Facilities Management encom-passes a wide variety of activities from project management and value creation activities to basic operations and maintenance. This sector of the market has grown considerably in Dubai and the UAE as a whole, in line with the rate of construction. However there has

2010. Levels of professionalism will emerge as competition increases and the demand for better perform-ing outsourced expertise rises – an expected subsequent change as the market matures and gets property

Middle East. “As a result these areas are commonly seen as key sources of revenue. Historical analysis shows that many successful developers in mature markets have developed comprehensive business models with an end to end real estate value chains by diversifying their business-es to include asset and fund man-agement driven revenue streams.” In the long-term, diversified devel-opers are those generating the best results, with average EBIT margins of 25-30 per cent and ROIs above 15 per cent.

A good example of a firm that demonstrates property manage-ment best practices is Hines, a suc-cessful privately owned, interna-tional real estate firm. This company approaches property and facility management from an owner’s per-spective, delivering high-level of service and asset management. The objective of this strategy is to out-perform competition by attracting the highest caliber tenants willing to pay high rents for the appro-priate level of service. As a result Hines' tenant retention averages more than 95 per cent of its square footage that comes up for renewal.

About A.T. KearneyA.T. Kearney is a global strategic management consulting firm known for helping clients gain lasting results through a combination of strategic insight and collaborative working style. The firm was established in 1926 to provide management advice concerning issues on the CEO’s agenda. Today they serve the largest global clients in all major industries. A.T. Kearney’s offices are located in major business centres in 33 countries.

headquarters, mixed-use centers, industrial parks, and others.

The example of Tishman Spey-erm-another global company with a long track-record from develop-ment to property management and asset management-highlights that some operations should re-main in-sourced as they are key value creators. Tishman has an in-house team of over 300 property management experts who oversee all aspects of the buildings opera-tions and “operate their buildings as if they were stand-alone businesses with a focus on making sure that the tenant’s needs are taken care of”.

Property asset owners in the region are entering a stage in the business cycle which represents a maturing market and this is char-acterised by a larger number of existing revenue-generating assets on the market and increased com-petition to come to manage them. Staying ahead will demand atten-tion to detail in the value chain and a commitment to delivering added value to the end user. “Key success factors will be driven by the effective implementation of best practices and the employment of management teams who can dem-onstrate solid track records in all three key areas of expertise; asset management, property manage-ment and facilities management businesses” added Olivier Laroche. “This operational approach would be beneficial for all large develop-ers to consider as part of their strat-egy for the future”.

been very little maturity within the standard of operations and a large proportion of these services remain managed in-house, having grown organically out of large local land-lords’ portfolio of assets. In Dubai only, although only 50 per cent of the market is outsourced today, the market size is siginifcant and estimated at around Dh10 billion in

management driven. The FM busi-ness generates returns between 5 to 10 per cent. It also adds value by protecting the assets and therefore generating increased profitability. Eighty per cent of the life-cycle costs of a building are in Facilities Manage-ment, not in the initial development and construction.

“Many successful Asian and US

Olivier Laroche

developers, operating in more ma-ture markets, typically focus on asset management and property management as the core of their strategy to maximise the value of their properties” said Olivier Laro-che, Senior Manager of A.T. Kearney

The Hines portfolio, valued at ap-proximately $25.8 billion, is a mix of projects under construction, completed, acquired and managed for third parties in diversified seg-ments including in residential tow-ers and communities, corporate

The reality is that the management of real estate assets in the region is often limited to poor quality reactionary led responses to repair needs with limited attention to preventative maintenance

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FINANCIAL ROUND-UPMARKET TRENDS & ANALYSIS //

REMNotes subscription deadline extendedShariah-compliant distress property fund records high demand among investors from the Middle East

Mayfair Wealth Management (MWM) a financial and in-vestment advisory services

providers based in the Cayman Is-lands, has extended the subscription deadline for its ‘Real Estate Mush-arakah Notes’ (REMNotes), a Shariah-compliant distressed property fund worth $50 million in the UAE, until October 29th, 2009. The move fol-lows the massive demand achieved by the fund among regional inves-tors. Taking advantage of the correc-tion in real estate prices, ‘REMNotes’ is expected to deliver an annual return of 12 to 15 per cent to investors by allowing them to participate in the acquisition of strategically sourced undervalued properties in the UAE.

Based on the Shariah principles of Musharakah, ‘REMNotes’ gives in-vestors an opportunity to invest in the UAE real estate market in a more secured manner while earning above average returns through future sales and long-term and short-term leas-ing of the properties. Available to individual, joint or corporate inves-tors for a minimum investment of $25,000, the property fund and its progress can be monitored through the semi-annual reports to be pub-lished by MWM and distributed to investors. MWM has partnered with E-valuations Chartered Surveyors, a Dubai-based valuation firm certified by the Royal Institution of Chartered Surveyors (RICS), and Mayfair Interna-

tional, a global property consultancy firm from the UK, who will ensure that the properties acquired are effi-ciently managed and will yield excel-lent returns.

“The huge demand for ‘REM-

Notes’ is a testament to the potential of this distress property fund and its attractiveness among investors, who appreciates, the simple and in-genious way it leverages the current downtrend in the property market,” said Amani Choudhry, CEO, Mayfair Wealth Management. “We have made a decision to extend the subscription deadline after seeing the massive attention and demand ‘REMNotes’ has garnered across the region, with many individuals and companies still expressing their intent interest to invest. We are confident that this extension will give them ample time to make their move and capitalise on this excellent investment opportu-nity.”

Amani Choudhry

Tasweek Real Estate Marketing and Development, an Abu Dhabi-based property advi-

sor and solutions provider serving the Middle East real estate markets, has announced that it plans to cre-ate a real estate investment port-folio worth $250 million featuring key Dubai and Abu Dhabi projects within the next 18 months.

Masood Al Awar, CEO, Tasweek Real Estate Marketing and Devel-opment, said: “We plan to acquire properties in free zones and invest-ment zones in Dubai and Abu Dhabi over the next few months. We have already begun acquiring properties using our own funds. We are ready for a steady start and are confident that we can raise the total amount

we need mainly through the sup-port of our shareholders and poten-tial investors.”

“We have already identified some strategic locations and we

are aiming for an asset structure comprising a mix of commercial, residential and retail investments,” he added.

Among the locations being eyed by Tasweek are Dubai Ma-rina, Jumeirah Beach Residence and Dubai International Financial Centre (DIFC) in Dubai and Reem Island, Al Raha Beach, and Building Material City in Abu Dhabi. The tar-geted acquisitions are expected to generate a return on investment of at least 10 per cent. The company will focus on transactions that can expand its core competencies of networking and professionalism and will decide on buying single units, complete floors or even projects at the opportune time.

Creating a real estate investment portfolioTasweek recently signed a

management and marketing con-sultancy Memoranda of Under-standing (MoU) with independent management and technology consulting firm RQ Associates Ltd. and strategic marketing, commu-nication and training consultancy IK Consult Ltd. The MoUs form part of TASWEEK’s strategy of offering a one-stop shop for real estate and related services and marketing.

“We recognize the need to meet the growing market demand for efficiency and effectiveness. We want to build on solid port-folios and services and further enhance our mediation between developers, customers and banks,” concluded Al Awar.

Masood Al Awar

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INTERVIEW

End-users take centrestageInvestors have taken a backseat amid an uptick in demand for residential properties says Choueri Real Estate

By Ambily Vijaykumar

“Dubai has been very kind to a lot of peo-ple. The amount of money that many

people made here, umpteen of them won’t be able to make that kind of money if they lived their lives three times over. But unfortu-nately most folks forget that,” says Laura Choueri, CEO and Managing Director of Choueri Real Estate Bro-ker (LLC).

The company has always had faith in the market, which has been re-affirmed with signs of activity beginning to show in the past two months.

“The fact is that investors have taken a backseat for the moment. They used to buy off-plan and flip, but now, with off-plan sales almost stagnant, investors are not jump-ing into the market with the earlier fervor. But they are collectively set-ting up funds to purchase property whether it is here or in London or USA. However it is the ready-to-move property market that is seeing a boom,” informs Georges Maurice, Manager-Operations at Choueri.

With a cumulative presence of about 16 years in the Dubai mar-ket, including the era before the freehold concept came into be-ing, Choueri holds a commercial broker’s licence with 20 real estate agents working for them.

So what has the year been like for the company? “It has been tough,” says Laura Choueri. A year also made tougher by banks closing their taps on the mortgage front.

So is the demand more for high end properties or for the middle

income? “There will always be a de-mand for high end properties. But the mass demand is for properties in the range of Dh1.5-4 million. In fact with the demand for ready-to-move properties on the rise, the problem now is of availability,” says Laura Choueri.

Banks are now beginning to open up lending, but with stricter rules. Some of which Choueri says need to be revised. “I know many who are not able to borrow be-cause of the industry they are in. Anywhere in the world, whether the market is up or down loans are available, percentages may change but banks don’t abandon you. These gaps need to be filled,” elaborates Laura. A solution to that, suggests Laura, should be to rede-fine the mortgage system in Dubai to match that in other leading mar-kets.

The year has also seen many changes and fluctuation in the real estate sector in Dubai, and that has reflected in prices for proper-ties across Dubai for example, Palm Jumeirah properties once touched Dh14 million then went down to about Dh6 million and now is back

in the range of Dh7.5-9 million. Property at The Springs went down to less than Dh1 million from Dh2.4 - 2.6 million but has bounced back to Dh1.6 million.

Choueri gives a thumbs up to the fol-lowing places in terms of property sales: Down-town Burj Dubai, Arabian

Ranches, Palm Island, JBR, Jumeirah Lake Towers, Dubai Marina, The Springs, Victory Heights, and The Greens. In terms of the rental mar-ket, they say wherever there is a property worth renting there is a client for it.

Currently property prices are at rock bottom says the company and hence it is the right time to invest because from here on, prices will appreciate; and with banks offering finance, this will definitely contrib-ute to properties’ appreciation.

The uptick is visible in the resi-dential property segment, but what about the commercial segment? Commercial, the company says, has begun to pick up in leasing and sales. This trend is being attrib-uted to people beginning to look at opportunities to have their own offices, people wanting to expand or those wanting to take advan-tage of offices that have been left furnished. Prices in the commercial sector might still come down and the supply is definitely more than the demand at this point.

A concern in the real estate sec-tor has been the developers’ in-ability to deliver on time. Choueri

says that they have had a couple of clients who have been disappoint-ed with having to pay for off-plan property that is not proceeding as per the developers’ promises.

“We have only dealt with devel-opers who have a RERA approved escrow account. Our job is to make sure that the product that we sell to our client is reliable. Despite that there are some developers who have not been able to proceed as per schedule, but none of the de-velopers have pulled out,” defends

Laura. Choueri also draws attention

to the need for proper regulation. Laura, being certified from Montre-al, Canada over 30 years ago, wel-comes RERA’s education initiative for brokers. Georges Maurice is an approved Instructor for brokers and he believes that introducing these regulations in the market will help the industry become more profes-sional.

Asked if Choueri has introduced additional services during these times, they mentioned about the activity of their sister company lccb |commercial brokers who offer extra services complimenting the real es-tate industry.

Laura Choueri

Georges Maurice

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On July 9, 2009, the In-ternational Accounting Standards Board (IASB) released the Interna-

tional Financial Reporting Standard (IFRS) for Small and Medium Enti-ties (SMEs). The IFRS for SMEs could transform the way privately held businesses around the world pre-pare their accounts. The standards are developed specifically for private companies and recognize that SME financial statement users are gener-ally more focused on cash flows, li-quidity, balance sheet strength, and solvency matters. The IFRS for SME standards represent a simplification of the full IFRS standards and elimi-nate many accounting requirements that are not generally relevant to private companies, such as earnings per share and segment reporting.

The new standard offers a unique opportunity to create a standardized accounting framework for privately held businesses throughout the world.

According to IASB, SME’s have been defined as entities that do not have public accountability, but still publish general purpose financial statements for external users such as banks, credit rating agencies, loan providers and so on. The UAE gov-ernment adopted IFRS long ago and banks in general, require companies to prepare accounts based on the IFRS. Though companies, over the years have been stating that finan-cials and accounts are based and prepared on the IFRS, not all the standards of IFRS & IAS are followed in true spirit for preparing accounts. IFRS for SMEs provides a substan-

COMMENTS

IFRS for SMEs: A Welcome MoveCA Atul Shukla, Audit Partner at Jitendra Chartered Accountants, says the adoption of the new standards for SMEs has the potential to be truly widespread in the region. This is because more than 95 per cent of the business entities/companies in the UAE are SMEs

tially simplified set of internationally recognized accounting principles for privately held businesses in the UAE. The new IFRS for SMEs is more relevant for companies in the UAE, because most companies operating in this market can be listed under the SME category. However certain entities such as stock exchange listed companies, other PJSCs, banks, insur-ance companies, large real estate de-velopers and brokers etc. will be spe-cifically required to follow full IFRS. Compared to the full IFRS, which was developed primarily for large busi-ness entities like listed companies, the new standards will particularly benefit medium sized businesses that operate internationally. At a mere 230 pages, a new version of the international accounting standards for non-public small and medium entities may win a big following, sooner rather than later. Adoption has the potential to be truly wide-

spread: more than 90 percent of the companies in the world are SMEs, according to the IASB. We expect individual countries to consider the new standards, consult with local stakeholders and decide whether and when it should be used in their jurisdiction. Individual countries will also have discretion over which en-tities the new standard will apply to – unlisted subsidiaries of listed multinationals, for instance, could be excluded in the scope. The new IFRS for SME will assist privately held businesses to meet the qualitative accounting standard requirements with affordable cost. We at Jitendra Group believe the IFRS for SMEs will be particularly welcome in those countries (more than 100 worldwide) that currently use full IFRS for all en-tities, listed and unlisted. In these countries, the pressure to reduce the administrative burden on SMEs will surely persuade governments to

adopt the new standards at the ear-liest. Converting to new accounting principles always involves some de-gree of financial and resource cost.

Lenders and private investors may also benefit from widespread adop-tion. The IFRS for SMEs also includes a set of illustrative financial statements and a presentation and disclosure checklist to assist entities while pre-paring their financial statements. The application of this standard is expect-ed to reduce the compliance costs for many smaller entities and help make the financial statements of such enti-ties less complex. In particular, the IFRS for SMEs will: provide improved comparability for users of accounts; ensure more adherence to standards as regards recognition, measurement, presentation and disclosure of any item in financials; Enhance the overall confidence in the accounts of SMEs; reduce the significant costs involved in maintaining accounts as per IFRS standards.

The IFRS for SMEs will also provide a platform for growing businesses that are preparing to enter public capital markets, where application of full IFRSs is required. The IFRS for SMEs is separate from full IFRSs and is there-fore available for any jurisdiction to adopt whether or not it has adopted the full IFRSs, It is also for each juris-diction to determine which entities should use the standard. It is effective immediately on issue. The IFRS for SMEs responds to strong internation-al demand from both developed and emerging economies for a uniform but simplified set of accounting stan-dards for smaller and medium-sized businesses.

CA Atul Shukla

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IFRS for SMEs: A Welcome Move

COMMENTS

With eight projects in its kitty at the moment, real estate developer Deyaar says it is “ex-

ploring various potential opportuni-ties in a range of markets across the region and beyond.” The statement is a testimony to the company’s claim that in a sector that has lost considerable momentum since last year as a result of the downturn, “it remains in a healthy cash position to fulfill all its commitments for project completion,” according to Markus Giebel, CEO, Deyaar Development.

The positive outcome, includ-ing a second quarter net profit of Dh75.40 million has been achieved as a result of sticking to a “larger strategy of safeguarding our cus-tomers and securing our cash flows,” elaborates Markus Giebel. Customer service, innovation and product and income diversification remain the key factors driving Deyaar’s growth strategy through the crisis.

Growth has also been consolidat-ed with the delivery of undertaken projects. “We have already fulfilled our pledge of delivering seven proj-ects this year. This includes our proj-ects in the UAE as well as our premi-um residential project in Beirut. We recently handed over The Citadel, the first commercial tower to be op-erational in the Business Bay neigh-bourhood,” informs Markus Giebel.

That raises a question of whether deadlines have been kept at the cost of other projects that have been cancelled. Deyaar clarifies that none of its undertaken projects have been cancelled. Flexibility is being exer-cised to ensure that the company’s customers get what has been prom-ised to them.

Negotiating the real estate transition

Deyaar says its coffers are well-stocked to fulfill commitments on its projects

By Ambily Vijaykumar

we continue to remain committed to our customers and provide them all the support and assistance in this period of transition in the real estate sector,” explains Giebel.

The transition phase has meant that Deyaar employ measures to remain operational cash flow posi-tive. Monitoring and managing cash flows, consolidating strategies on project and customer level, financial modelling to factor different mar-ket scenarios, revaluation of future growth strategies, implementation of negotiation teams and diversifica-tion of revenue streams are some of the adjustments that the developer has taken to remain successful under the current financial circumstances.

Future strategies encompass an obvious path for developers that in-clude new projects. But Deyaar says there are no new project launches that are planned in the next quarter. “We are constantly monitoring the market, and if there is potential in the market to absorb more supply, we will definitely consider the op-

portunity,” says Markus Giebel. Deyaar’s strong position is also

reflected by the fact that the devel-oper currently has one of the biggest land banks in Dubai’s premier mas-ter planned communities a-position it believes it will be able to make the most of with the signals of a recovery beginning to show.

One of the important steps to-wards achieving that recovery is also the easing of lending norms by the banking sector. With a strategic part-nership with seven of the UAE’s lead-ing banks, Deyaar says it is assisting its customers gain access to the best mortgage financing options.

“From a demand perspective, it is important that the constraints in terms of buyers’ financing begin to ease for price stabilization and trans-action volume growth to return. We are already seeing that happen in some segments and projects,” says Markus Giebel.

From a business standpoint, Deyaar has reduced costs on certain projects and also restructured pay-ment schedule on others to help customers faced with the challenge of restrained liquidity. But the reduc-tion, they say, has been “in line with market trends.” These steps have ensured that the company is able to safeguard its customers by stabi-lizing their cash flows and helping them secure easier access to finance. Simultaneously, the company aims to lower the risk of defaults and receiv-ables risk by maintaining a healthy cash flow. What this is likely to do is drive new enquiries from investors who are sitting on the fence due to lack of favourable financing options.

“We are starting to see price stabi-lization in some areas and a potential

uptick in a few neighbourhoods. As an international real estate market, Dubai has some very strong factors in its favour and we continue to be pleased with government initiatives to spur overall spending and con-fidence in the marketplace,” states Giebel.

Price stabilization is being en-abled largely due to the non-existent off-plan market. That has resulted in virtually no speculative pressure on pricing. Negotiating the crisis has been a challenge for the real estate sector at large and Deyaar is no different. To facilitate smooth functioning and to keep projects on track, the developer has divided its entire project portfolio into four cat-egories, each of which comprises 25 per cent of the overall portfolio.

“Twenty five per cent of our port-folio consists of projects under con-struction. We remain committed to all our projects currently underway. In fact, we handed over seven proj-ects this year which were in various stages of construction when the im-pact began to be felt in the local real estate market. However, a portion of our portfolio that consists of unan-nounced and unsold projects has been temporarily put on hold until the market is ready to absorb more supply,” Giebel elaborates.

The current market scenario however has not deterred Deyaar’s plans that remain “extremely dy-namic”. The developer looks at the current phase as an opportunity for the real estate sector to set the foun-dation for long term sustainable growth. The developer says that it is well positioned to take advantage of emerging opportunities over the next two years.

As part of Deyaar’s strategy, customers are given the choice to consolidate their units in projects that are likely to witness quicker completion and have superior in-frastructure. “We have had to align our resources and revisit our plans in line with market conditions. But

Markus Giebel

The Citadel

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COMMENTS

What is a LED?LED stands for “Light Emitting Di-ode”. They are small electronic com-ponents that transform electricity into light. Applications of LED are diverse but they are mostly used in the Automotive Industry, for indicators and signs, and for light-ing. Amongst all their great advan-tages, one amazing thing surely is their long lifetime: from 70.000 to 100.000 hours, and over time they don’t switch off: they slowly lose brightness. This electronic light source is also highly efficient be-cause it produces more lumen per Watt than other light source. LED is also a cost effective solution. Its compact size also makes it easy to use and integrate into small spaces, and it can produce more than 16.7 million different colours, which intensity and brightness can be dimmed. Being solid state com-ponents that do not contain any mercury, LEDs are more robust and shock resistant than any other light source; the emitted light is di-rectional without needing to use external reflector to collect and di-rect the light.

Why recommend the LED technology for Lighting?We are convinced it is the light of the future. First of all, national and

LED MediaFacade & Architectural LightingDubai Real Times spoke to M. Alberto Ramón, Citiled’s Managing Director

international laws already started to forbid the use of traditional light source such as incandescent light

bulb, in order to move to more efficient lighting to reduce electricity use and greenhouse gases; and LED is one way of replace-ment. Also, new standards and regulation for Con-struction, such as LEED, EHS Green Regulations in Dubai or HQE in France, will automatically push people to look for eco-friendly solutions. All in all, LED supports sustainable architecture and repre-

sents the most environmentally-friendly option: it is non toxic and shows low carbon footprint. For

example, a building’s lighting car-bon footprint can be reduced by 70 per cent by changing traditional incandescent bulbs for LED-based lights. It’s also a cost-effective solu-tion in regards to its high efficiency, its long lifespan and the lower cost of maintenance.

Architectural Lighting & MediaFacadeLED technology contributes to im-prove the visibility of iconic real es-tate projects and creates impact for advertising and strong corporate identities. Citiled’s expertise helps maximize the return for the devel-oper by delivering state-of-the-art

M. Alberto Ramón

Cocor Luxury Store - Bucharest, Romania

Citiled is a company specialized in Concept Design, Consultancy & Supply of LED MediaFacade Systems integrated into Architecture, with offices in Dubai and Paris. From concept design to final handover, Citiled offers: LED Digital Out-Of-Home (OOH) & MediaFacade systems, LED Dynamic Architectural Lighting and LED Landscape & Street Lighting.

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architectural projects. Citiled applies its Specific and Unique Know-How to LED MediaFacade Systems inte-gration into likewise unique archi-tectural projects.

Custom Concept & Product DesignCitiled is specialized in customized LED Lighting and Video Systems specifically designed for Architec-tural purposes. We call it “MediaFa-cade”, a mix of video imagery with dynamic lighting or “MediaLight-ing”, fully integrated into the fa-cades of buildings, allowing trans-parency from the inside and a new skin from the outside. The system is controlled altogether in a coherent and synchronized way. Every kind of image source can be imagined: ad-vertising, video, pictures, graphics, animations, texts, etc. Every single project being unique, we specialize in finding customized solutions in order to obtain the exact result de-veloped through the design phase. This process enables Citiled to con-stantly create and offer new cutting-edge and innovative solutions to our clients and partners. For example, we have patented the process of in-tegrating small LEDs in between the two panes of a double-glazed win-dow (Digital MediaFacade 2.0), this solution removes the internal light reflection on the glass and facilitate window cleaning. Citiled is actively participating in the evolution of LED technology applied to Architecture. As such, it can be considered as a new architectural material.

Lighting & Video Systems ControlA MediaFacade is managed through very simple electronic and computer systems that control the whole installation from one single PC Room. For the operating people, the process is easy-to-use, powerful and flexible. This software tool is custom-made to facilitate every op-eration for the user. From any type of images and video (Internet, Ani-mations, DVD, etc.) it allows infinite possibilities to coordinate what is displayed on the MediaFacade.

Project PortfolioOur team members have worked on

many projects, located all over the globe. Amongst many others: the Agbar Tower in Barcelona (Spain), United Tower in Jeddah (Kingdom of Saudi Arabia), Grand Indonesia in Ja-karta (Indonesia), Cocor Luxury Store in Bucharest (Romania), or Monoprix Tower in Paris (France). Citiled main-tains a global presence through its Paris Headquarters and the Dubai Regional Branch.

The CompanyCompany founders have been work-ing with the LED technology since 1996. They’ve participated and wit-nessed the advancements made by this cutting-edge technology. The range of LED applications have widen in the last decade, going from Industrial to Architectural us-age, passing by Lighting and Video Systems. Citiled is made of a team of highly qualified professionals who

bring their expertise and knowledge to participate to the constant devel-opment and evolution of the LED technology applied to architectural applications. Since 2006, Citiled has been almost exclusively working on large scale architectural projects, by designing and developing custom-ized lighting and video solutions, street lighting and lighting objects. “Citiled’s growth strategy of expan-sion led us to explore new territories, especially in the Middle East & North Africa, and developing countries. Thus opening a regional branch of-fice Dubai has been a natural devel-opment Citiled, as the Middle East is showing a great urban development dedicated to being a cutting-edge, attractive & modern region“.

Plans for the FutureThe LED market will certainly show a prosperous growth throughout the

next years, because it is the environ-mentally-friendly solution for lighting and the more cost effective one too. Lighting and video systems using LED technology will benefit from this mar-ket expansion, as a new architectural material that participate in renewing and giving new dynamics to cities and urban spaces in general.

Citiled is planning on strengthen-ing its presence and growth in the MENA Region and in developing countries. With the delivery of what will be the biggest MediaFacade in-tegrated into a tower (6.000 sqm) in Jeddah (KSA) at the beginning of 2010, we will have proven why we belong here because we are one of the few capable of offering specific and unique design and solutions for Architects, Developers, Lighting De-signers, Investors, etc.

Citiled & CityscapeCitiled will be present at the next Cityscape tradeshow in Dubai from 5th to 8th October 2009, in Hall 7, stand 7G30. Cityscape is one of the World’s largest international events dedicated to the real estate industry investment and development. After the success of our presence as Archi-tectural Awards Sponsor during the first edition of Cityscape Saudi Arabia, we decided to continue investing in Cityscape. We would like to take this opportunity to thank Cityscape orga-nizers and team for their great dedi-cation to create and deliver what we believe is a highly demanding and qualitative event in the Real Estate business. Our presence during the show will be a great opportunity for reaching out to our clients and part-ners with our innovative design con-cepts and cutting edge solutions.

United Office Tower - Jeddah, KSA

Digital MediaFacade - View from inside

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When Limitless, the Dubai-based real es-tate developer chal-lenged me to take

their pedometer test, I thought it would be a piece of cake. But here I am, already half way through the day, yet less than 20 per cent on my way to reaching that all important number: 10,000.

I’ve been wearing my pedometer for five days now. The small, digital device is permanently strapped to my waist, and has become as essen-tial to my daily routine as my Black-berry, vitamin tablet and morning cappuccino. It’s also an obsession, as I check – and check again – the number of steps I’m notching up ev-ery couple of minutes.

While I’ve always considered myself to be fairly fit, often taking the stairs instead of the elevator, walking around the office to speak to colleagues instead of emailing someone who sits less than 50 me-tres away from me, and strolling over to my local shops and restaurants in the evenings, this ‘ped test’ has giv-en me a wake up call. I am, like most Dubai residents, falling way short of the ground I should cover for opti-mum health.

I’m taking part in this research as part of Limitless’ ongoing study into the walking habits and transport us-age of residents in Dubai. The com-pany’s survey of 625 people, includ-

COMMENTS

Experts recommend taking 10,000 steps a day to maintain a healthy lifestyle. But as Rachel Jones discovers, taking fitness in one’s stride is easier said than done

8.05am: 297. 8.51am: 748. 9.30am: 1094. 1.04pm: 1526.

ing 188 who wore pedometers to track their steps for a week, found that people in the emirate are, on average, walking only half as much as they should, at 5,506 steps at day. While around half of them make a conscious effort to walk – for bet-ter health, to lose weight or to avoid parking problems – one in 20 admits that they never walk anywhere.

Now, you’re probably reading this and thinking “who on earth wants to walk in this heat?”, but I should point out that the study was carried out in March, when temperatures are con-siderably cooler – so much so that, if you’re anything like me, you seriously consider buying a winter coat.

According to the company, physi-cal inactivity costs economies bil-lions of dollars, as it places enormous strain on health services and causes lost working days through sick leave.

The company’s CEO, Saeed Ahmed Saeed, believes that ‘walkable’ com-munities with carefully planned infrastructure can contribute to a more sustainable society by boost-ing the economy, improving social lives and reducing harmful emission from cars. It is for this reason that Limitless is promoting social interac-tion and wellbeing by designing sus-tainable communities where people can walk in safety and comfort. Its Downtown Jebel Ali (www.down-townjebelali.com) project in Dubai, for example, includes public open spaces, shaded areas and affordable, environmentally-friendly transport alternatives to the car.

The study showed that Asians and Westerners living in Dubai walk the most, at 6687 and 6135 paces a day respectively. Residents of Bur Dubai walk more than people in any other location (6416); and 45 to 60 year olds cover more ground than any other age group, taking 8128 steps daily – almost 3,000 more than the average. Income plays a part too: those paid less than Dh15, 000 a month taking 31 per cent more steps than people earning Dh25, 000 or more.

The Dubai Metro is poised to cut car use significantly: respondents to the survey say that they will give up the car for some journeys and use the Metro instead. Currently, cars outweigh any other form of trans-

port in Dubai, with residents driv-ing, on average, on 24 days each month. In any given week, 80 per cent will use the car, 42 per cent taxis, 20 per cent RTA buses; 14 per cent company-provided transport, eight per cent boat and six per cent bicycle.

But while many are currently walking less than they should, most people in Dubai are keen to step up their walking routine, given the right facilities. Ninety per cent of those questioned say that shaded streets and parks would encourage them to stroll regularly.

Meanwhile, if you’re keen to do more walking but can’t stand the heat, there’s always the air-condi-tioned comfort of the great indoors. Dubai’s malls are more than a place to eat, see the latest blockbuster movie or browse the sales, accord-ing to residents, who told Limitless than they often visit the mall – for an hour at a time, on average – just to walk. Others strive to reach their daily walking quota by hitting the treadmill. Given my ‘ped test’ track record, averaging just under 5,000 steps a day, I think it’s high time I hit the shops, or the gym, myself ....

Limitless is keen to hear people’s views on walking in Dubai. Comments can be emailed to walking@limitless.com

5.15pm: 2194. 7.31pm: 3027. 8.13am: 3624. 10.22pm: 4728.

Saeed Ahmed Saeed, CEO, Limitless

Walking around

The Gallerie

20533Rera315x230.indd 1 8/23/09 3:19:31 PM

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20533Rera315x230.indd 1 8/23/09 3:19:31 PM

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COMMUNITY

Charity Time

The blessed month of Ramadan gave Dubaiians an opportunity to reach out to the underprivileged

More than 7,000 con-struction workers in Dubai received a gift in the form of a shoe

box filled with personal items, post Ramadan. All due to the charitable efforts of Radisson Blu Hotel, Dubai Media City and organisations like Helping Hands plus key organisa-tions, including TECOM, City 7 TV, Union Papers Mills and Strategic Solutions and DHL. “The campaign team have received just over 7,000 boxes, donations worth a value of Dh875,000, and the momentum from individuals and organisations looks set to continue,” said Pasquale Baiguera, General Manager, Radis-son Blu Hotel, Dubai Media City.

“A number of schools showed wonderful enthusiasm with chil-dren, faculty and parents joining hands to help us meet the cam-

paign target,” said Baiguera. Elle of the Roger and Elle duo at Helping Hands, the organisation behind the concept said that the campaign reaches out to the emirate’s con-struction workers “who are very much the silent backbone of Dubai’s city infrastructure”. “A simple, smart and engaging idea such is the Shoe Box Appeal shows its ability to mo-bilise community engagement for a community cause,” she said. The campaign that ran till September 30, 2009 and also marks the annual Re-sponsible Business month for Radis-son Blu Hotel, Dubai Media City.

“We want our children to ap-preciate how fortunate they are, and that they can help make even a small difference to the lives of people less fortunate than them-selves in this way. Our children and staff very much shared the spirit

of Ramadan through their efforts,” said Tim Waley, Principal of Raffles International School, West Campus Dubai. The school raised Dh96,000 worth of donation boxes, 800 in to-tal, after they opened for the new school year.

“We are building a sense of com-munity at The Galleries through a series of tenant relations initiatives that encourage new friendships and enhance business relationships. The Ramadan Shoe Box Appeal brought together tenants who have recently moved into the office towers at the development. Between them, they donated scores of boxes,” said Christo Diamandopoulos, Senior Operations Manager at The Galler-ies. Limitless, the Dubai-based mas-ter developer, collected nearly 200 boxes through its tenants at The Galleries at Downtown Jebel Ali.

“We want our children to appreciate how fortunate they are, and that they can help make even a small difference to the lives of people less fortunate than themselves in this way. Our children and staff very much shared the spirit of Ramadan through their efforts”

A shoe box gift for workers contain essential items of daily use. The simple and engaging idea of Shoe Box Appeal mobilises communities in the holy month of Ramadan.

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Dubai Properties Group (DPG), a member of Dubai Holding concluded a suc-

cessful eight-week Summer Chal-lenge - a healthy lifestyle campaign that drew participation of about 75 employees in various contests for getting into shape and losing weight. Organised in collabora-tion with The City Hospital, the first multi-disciplinary hospital at Dubai Healthcare City (DHCC), the Sum-mer Challenge offered comple-mentary weight monitoring and check-ups for blood pressure, body mass index (BMI), and sugar levels.

Conducted by dedicated spe-cialists from The City Hospital, the campaign also ran lectures for

When losing is winningHere was one instance when winners were the losers

employees while a physical thera-pist held one-to-one support and counselling sessions. As the Sum-mer Challenge Champion, the first prize winner Jameel Moidheen lost 14.9kg during the two month initia-tive, dropping 4.3 points on the BMI. The second prize winner Maha Ma-jid lost 6kg, dropping 2.3 points on the BMI, while the third winner Mo-hamed Ashraf lost 3kg and dropped 1.4 points.

At a gala awards ceremony, senior DPG officials presented the winners with exciting prizes including mem-berships and vouchers from Fitness First and Healthy Ways.

Fareda Abdullah, Executive Di-rector of Human Capital said: “The

DPG Summer Challenge provided a platform to encourage employees to change their daily routines, eat healthier foods and exercise regu-larly. Over a short period of time, the programme has registered spec-tacular results and we are confident more employees will commit to a healthier lifestyle even after the con-clusion of the challenge. The chal-lenge initiative helped us endorse a healthy lifestyle and build a positive environment within the organiza-tion. It particularly highlighted key workplace qualities such as self-con-fidence, productivity and construc-tive attitude.”

The City Hospital is a state-of-the-art, 210-bed multi-disciplinary

medical institution offering world-class preventative, primary, second-ary, tertiary and even rehabilitative healthcare in a sophisticated ambi-ence.

As a property-oriented business operation and a complete solutions provider, Dubai Properties Group places considerable emphasis on delivering top-notch services to clients. Through partnerships with various management and business excellence organisations, DPG con-tinuously endeavours to support activities that promote the profes-sional growth of its employees as part of a larger objective to contrib-ute to the overall development of the real estate sector in the region.

Summit HeroesDubai Holding executives raise Dubai Cares banner on Mt Kilimanjaro. During a recent visit to East Africa, executives from Dubai Holding completed a climb of Mt Kilimanjaro, in Eastern Tanzania - the highest mountain on the African continent rising 4,600 m (15,100 ft) from its base for Dubai Cares. Pictured top left-right: Soud Ba’alawi; Cedric Betis; Gerald Lawless; Fadel Al Ali. Bottom left-right: Hashim Al Dabbal; Ali Tabbal; Khalfan Khalfan; Ahmad Bin Byat.

Ramadan ReminiscencesDIFC and City of Arabia teamed up once again for their celebrated Ramadan Majlis at the Emperor Hall located in DIFC District during the Holy Month. Abdulla bin Hamad Bin Sougat, Chief Executive Officer of the DIFC Lifestyle Group, pointed out that the Holy Month of Ramadan is an important time for prayer and reflection for people in the Muslim world. “It is a time to celebrate the generosity and compassion of God with families and friends.

Victory Heights held a Suhour to celebrate the holy month of Ramadan with its homeowners. The attendance also included Victory Heights team and media representatives. The event was held on 10th of September 2009 at the Els Club.

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FOCUS

Do it yourselfBy Hashim Ahmed

Platform, platform, platform. The world is changing. Those forward thinking enough to change along

with it are also those who stand to make the most gains in the coming years. Few worldwide markets have been as affected by the most recent world revision as Dubai property and, in general, UAE real estate.

It is new services such as for-sale-by-owner property platforms which allows buyer and seller to mutu-ally engage, that have sometimes slowed or impeded the process throughout the industry’s history. If the Internet has proved one thing above all others, it is that the ‘Do It Yourself’ mentality is alive and well in the human race. A for-sale-by-owner (FSBO) property listing ser-vice allowing buyers and sellers to trade was only a matter of time for the maturing UAE real estate mar-ket.

For the first time, UAE property owners can now provide individual-ized attention to buyers or renters, who in turn find themselves more in touch with the entire property buy-ing or renting process. Beeyoot.com is a newly established Dubai-based FSBO property listing service for in-vestors of UAE property.

By introducing a direct conduit between buyer and seller for the UAE property market, both sides can now achieve balance and unri-valed benefit. FSBO real estate list-ing platforms serves the interests of both parties best. On one side, using a direct channel to buy, sell or rent, saves buyers from paying commis-sion or agency fees. On the other side, property sellers enjoy dealing directly with buyers, encouraging them to freely ask questions and negotiate. The transparent nature

of this new online relationship leads to a gain in efficiency and greatly reduces the time it takes to close a deal.

An overwhelming percentage of property buyers and sellers, land-lords and tenants, in the UAE still choose to hire a broker to navigate the transaction. Just as developers use escrow companies, buyers and sellers will continue to employ the use of third party services to ensure everyone’s needs are being met and no one is being taken advantage of.

Of course, no great change can happen overnight. Evolution takes time and while the company’s FSBO platform may be well ahead of the curve in the region; there will cer-tainly be a multitude of real estate investors who will be far too slow to catch up, handling their real estate portfolio in the old outdated ways and missing the beauty of using a FSBO online marketplace, where agents, buyers, sellers, and sup-pliers can all coexist in capitalistic harmony - such as in matured real

Those who will now embrace a FSBO channel for their property selling or renting process will get the best of both worlds!

FSBOs are based on the following premise: The more buyers and sell-ers who join, the more robust the community. More properties listed means more buyers looking. More buyers looking means that there will be a multiplicity of sellers more than willing to list property using a FSBO channel such as UAE’s Beeyoot.com

estate markets using Multiple List-ing Services (MLS).

The Dubai real estate community is slowly discovering that buyers and sellers can function independently with fantastic results. Property own-ers using Beeyoot’s FSBO platform are already benefitting from RERA registered brokers who frequent the platform to contact owners when they have buyers or renters. Any concern over the legalities or safety of such transactions are completely

unfounded. FSBO platforms follow every law. The only difference is that the needs of the buyer and seller are being put first.

One comparable model that is starting to see its share of success as a bold proclamation of things to come is the Home Owners Associa-tion. Introduced by Dubai’s RERA, it endeavours to place the power di-rectly into homeowner’s hands rath-er than dispersing it amongst parties who hold only temporary interest in the transaction. These efforts are

helping to make buying, owning and maintaining property in the UAE much easier, less expensive, and most importantly, excitingly transparent.

Progress can’t be stopped, and there is no doubt advancements are now knocking on the recover-ing UAE real estate industry’s door.

Hashim Ahmed is the Managing Di-rector of Beeyoot.com. He can be reached at hashim@beeyoot.com

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INTERVIEW

Backed by the financial soundness of its two bil-lion dollar parent company, Schon Properties (SP) says

that it is well placed to sail through the crisis. The developer that is be-hind projects like the Dubai Lagoon, Schon Business Park and Schon Resi-dences, among others, says that a majority of their portfolio has been sold out.

Danial H Schon, Vice President, Schon Properties informs that the handover for the first 500 apart-ments at the Dubai Lagoons project will begin by the end of this year or early next year. Dubai Lagoons has a total of 49 buildings and is in line with the “vision of Schon Properties to provide affordable housing to residents of Dubai,” says Danial.

A key feature of the project is a building zoned for ‘time share’, a concept that SP says is the future. “I see a big time share boom coming into Dubai in the next three to five years because Dubai is a very good holiday destination,” says Danial.

Explaining the concept futher, Danial says, “for example, if a per-son pays Dh50,000-55,000 over two years, he gets a right to use the property at the Dubai Lagoons for one week every year for the next forty years.”

If the person does not want to come to Dubai, Schon properties can rent that property out for the buyer or even switch places de-pending upon a person’s choice of destination. This gives the person an opportunity to holiday all over the globe, “for a very reasonable

Time-share boom soonSchon Properties believes that Dubai’s location and infrastructure makes it an ideal destination for the time-share concept to take shapeBy Ambily Vijaykumar

cost.”Apart from this concept, the de-

veloper has six projects currently on its plate. Out of it about 80 per cent is centered on residential proj-ects. But why the tilt towards resi-dential projects?

“We saw a big opportunity in the affordable residential projects. With land prices dramatically es-calating here in 2008, it directly re-flected on the pricing of property. It was very difficult to sell some-thing at Dh700 per sq foot,” elabo-rates Danial.

So did Schon Properties have to slash their property rates in order to be able to find buyers? “We haven’t reduced prices to find buyers. We have actually started receiving calls

recently, because there is a metro station next to Dubai Lagoons. I be-lieve in the future, locations close to the metro will have one and a half times the value of the ones that aren’t,” states Danial.

The company says it has been “sitting with customers for price revisions so that things can return to a more realistic level.” A reality check has also meant that the com-pany is now prioritising construc-tion and delivery of its projects. With construction costs coming down, customers are also demand-ing discounts. The company has cut overheads. It is awaiting the land handover for one of its forthcom-ing projects called Signet, which is expected to kickstart in a couple of months.

With Dubai’s central location, a lot of investors showed keen inter-est in owning a hotel, but did not have the necessary finances. About 300 investors were assembled un-der the Schon Suites umbrella to construct a hotel that will have in-vestors getting returns while shar-ing profit with Schon Properties who will also undertake the task of managing the hotel.

Dubai’s celebrity status during the real estate boom also affected

Danial H Schon

it adversely with desperate sellers spoiling the game and dragging down rates drastically. But now things are beginning to look up be-lieves Schon.

“The clean up was essential and this has resulted in genuine business people staying behind. So the next time you meet people on a profes-sional level, you know they are the ones who have stood by during the tough times and are not going to abandon and leave the place,” says Danial.

The company says that the clean-up has largely been the result of RERA enforcing strict regulations with regard to property ownerships whether it is the developer, broker or end user. The cracking of the whip was essential, says Schon with speculators damaging the market. So was the company adversely af-fected by these speculators?

“That has been one of the plus points for us. When we launched, we targeted end-users and we got them. Though investors did buy from us, they sold it to end-users. We had a very small percentage of investors to begin with,” Danial ex-plains.

The future, says the company, lies in the affordable housing seg-ment of which there is a huge scar-city. Schon Properties is buying land in Dubai to launch affordable hous-ing projects when the market picks up. With the ready property market already picking up and prices be-ginning to rise, Schon Properties says it is time to be realistic as far as growth is concerned.

“We have actually started receiving calls recently, because there is a metro station next to Dubai Lagoons”

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FOCUS

Jumeirah Lakes Towers is a dynamic waterfront commu-nity, encompassing attractive residential and office towers

alongside hotels, leisure and retail outlets. A total of 87 towers will stand tall in this prestigious project, with 78 of them clustered in groups of three alongside beautifully land-scaped gardens and unique wa-terways. Four winding, man-made lakes, stretching to approximately 179,000 square metres create a vi-brant waterfront environment. Situ-ated along the Sheikh Zayed Road between interchange 5 and 5.5, with 34 completed towers, 1700 compa-nies and more than 10,000 residents, JLT is becoming the community of choice for residents and businesses alike.

The upcoming 200 acre mixed-use, real estate development, is fully owned by the Dubai Multi Com-modities Centre Authority. JLT was conceptualised with the intention

JLT Free Zone simplifies licensing procedures

to fulfill DMCC’s mandate to pro-vide the physical infrastructure for businesses wishing to set up offices in Dubai, covering a wide range of commercial activities. Accordingly it has been designed as a free zone freehold community and offers all related services to its ever increas-ing population.

JLT was conceived with the idea of meeting the demands of the 21st Century urban professional’s living and working environment.

Ahmed bin Sulayem, Executive Chairman DMCC, talks about the development of JLT as a free zone as well as its impact on the Dubai economy.

How has the vision of JLT unfold-ed over the past few years?JLT was envisioned as a unique wa-terfront master development, nur-turing both trade and community living. It is a novel mixed-use free

zone, offering both freehold prop-erty and leasing options. Already home to 1,700 companies and more that 10,000 residents in 34 tow-ers, including 18 residential towers, JLT is progressing fast and on track for completion in mid-2012. Upon completion, 87 skyscrapers will

ply for a trade licence in order to set up within the JLT Free zone? As the regulatory body for JLT, which is within the Dubai Multi Commodi-ties Centre (DMCC) Free Zone, the Dubai Multi Commodity Centre Au-thority (DMCCA) is the official licens-ing authority. We offer two types of

reach for the sky in this prestigious development located in New Dubai alongside Sheikh Zayed Road inter-change no. 5.

What kind of companies can ap-

licences. One is specifically for the commodities sector (DMCC License) and the other is for a wide range of commercial activities (JLT License). Although initially JLT was a company in the commodities industry, today

“JLT offers something unique to every audience, be it trade or individuals. For many, it offers quick and efficient licensing procedures that we have in place, coupled with the solid regulation that DMCCA provides”

Jumeriah Lakes, Jumeirah Lakes Towers and Dubai Marina

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there are several hundred licensed companies from a large cross-sec-tion of commercial entities, includ-ing trading, manufacturing and ser-vice industries located within JLT. This includes energy, media, prop-erty, electronics, shipping, IT solu-tions, consultancy and architectural concerns, among others. Despite the current economic conditions, we continue to receive a growing number of inquiries from a broad spectrum of companies that look at making JLT integral to their strategic plans and future activities.

Dubai already has quite a num-ber of established free zones. What additional appeal does JLT have for commercial entities? JLT offers something unique to ev-ery audience, be it trade or individu-als. For many, it offers quick and effi-cient licensing procedures that we have in place, coupled with the sol-id regulation that DMCCA provides. For others, it the ability to buy free-hold property or lease office space from the open secondary market here in JLT at very competitive pric-es. As JLT offers both residential and commercial developments within the free zone, employees can locate where there is no commute. Stra-tegically located between old and new Dubai, JLT's location is one of its biggest appeals.

Given the current economic climate, have you simplified your licensing procedures to attract companies to set up in JLT? Yes we have made our licensing process as efficient as possible while still maintaining high standards of regulation and compliance. Recent-ly, we have implemented several new internal procedures, reducing the number of documents required when applying for a JLT license. The process is now simpler and faster for everyone with the initial stage being completed within a few days. Our team of licensing officers en-sure that the majority of licences are processed within a couple of weeks, and even faster if we have all the required documentation in order from the start. On an ongo-ing basis, we review our processes at every stage in order to improve

efficiency.

What does the JLT location offer companies and residents con-sidering moving to the develop-ment?From a community level, the towers within this master community are strategically situated to give breath-taking panoramic views of not only JLT but the surrounding area which includes Dubai Marina, Jumeirah Beach and Islands, and Emirates Hills all at the same time. JLT is the only community to offer such prime views including that of our flagship Almas Tower, which at 65 stories is the tallest, exclusive business tower in Dubai. Easy accessibility and the transportation infrastructure are key benefits. JLT has two entrances, direct access to the Sheikh Zayed Road, overpass and walkways to the Marina, and two dedicated metro stations. A vast amount of of-fice space and residential space to-gether make it an excellent area to live, work and invest in. We are the only master community currently to deliver such extensive benefits and amenities within a single com-munity offering freehold and free zone options.

With so many companies now moving into JLT and completing fit outs, the whole free zone is taking shape and becoming a hive of busi-ness activity. JLT is about providing a community that caters for both businesses and residents, where people can work, relax and live their lives with all the necessary ameni-ties.

There is some ongoing con-struction; however at least 50 of the proposed 87 towers will be com-pleted and fully operational by the end of 2009. Currently, 34 towers are completed including 18 residential towers and nine office towers in addition to five towers that are res-idential-cum-offices. The remaining two completed towers include a hotel and hotel apartments.

With one of the lakes already full, we look forward to the next, with all four of the proposed lakes expected to be completed by mid 2010. Lake Zafeer– the first lake – was filled in early 2009 and the second is on track for completion early next year.

The last to be filled will be Almas East and West and these will com-plete JLT’s water-front community.

How is JLT contributing to the development and economy of Dubai?

The JLT Free Zone was estab-lished in 2006 and today we have over 1,700 companies operating under DMCC and JLT licences and bringing with them multi-billion

“The process is now simpler and faster for everyone with the initial stage being completed within a few days. Our team of licensing officers ensure that the majority of licences are processed within a couple of weeks, and even faster if we have all the required documentation in order from the start”

dollar foreign investments. Since in-ception, JLT has witnessed significant changes and is now busy growing into a mixed use community, where well over 10,000 residents currently live and work. Of course JLT has the distinction of being the first mixed-use free zone in Dubai, offering both freehold as well as leasehold prop-erty options. Today we are working towards completion of our develop-

Lake Zafeer at JLT

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ment and taking on the challenges that this exceptional combination of mixed uses has brought to us as the Master Developer (DMCCA).

The cluster effect that JLT pro-vides gives a huge boost to other local and regional industries such as transportation, import/export, construction, consumables, tele-communications, and many other service providers. Free zones play a vital role in the economy of Dubai and we put a huge amount of ef-fort into attracting companies from around the world who inevi-tably invest in Dubai and bring with them not only investment but great

Additional information and background JLT FREE ZONE BENEFITS

100% Corporate Tax exemption

100% Import and Export Tax exemption

100% Personal Income Tax exemption

100% Freehold property available for purchase as well as leasing

Licences available for a wide variety of business activities (JLT/DMCC)

INVESTMENT INCENTIVES:100% Foreign Company ownership

100% Repatriation of capital and profits

100% Freehold property ownership

No customs duty

No currency restrictions

TYPES OF COMPANIES: A wide range of business activities can be licensed (NOT just commodities)

Minimum share capital of Dh300, 000 (JLT) Dh 200,000 (DMCC) (This is only heldfor a short period in your own company account)

Branch, Subsidiary and New Company set up available

Sole shareholders also allowed

REGISTRATION PROCESS:Fill in and sign a ‘Know Your Client’ form

Provide Passport copies of shareholders

Decide on a Company name

Call us on 8003622

KPMG Lower Gulf Limited (Branch)

Emirates NBD

Total

Bylaw Consultants JLT

Serene Consultancy JLT

Convergent Media JLT

Viacom ME JLT

Praxis Solutions JLT

Reliance Engineering (Middle East) DMCC

Orion Corp.

Damas Vault DMCC

Conoco Phillips International Trading PTE. LTD

Schweger Associated Architects GmbH (Branch)

knowledge and experience across all sectors of business.

Dubai’s strong trading heritage, it is well established port and lo-gistical infrastructure, as well as its geographical location and being a significant gateway for many com-modities into the surrounding re-gion make Dubai the ideal location for a huge variety of businesses involved directly or indirectly with trading. DMCC is well known for providing the infrastructure and prime location for many of these companies and we pride ourselves on having created a regional trad-ing hub here at JLT.

Oaks Hotels & Resorts JLT

The House of Cakes Bakery FZCO (JLT Branch)

Rockwell Group Middle East JLT

Vitol Euroasia DMCC

National Bank RAK

Sinopec

Compass Ocean Logistics LLC

Vela International Marine Limited (Saudi Aramco)

Xstrata Commodities Middle East DMCC

Reef Real Estate Investment Co L.L.C (Branch)

Perfetti Van Melle Middle East (Branch)

Emirates Gold DMCC

Fitness First

Rosy Blue DMCC

Emirates Shipping Line (LLC) (JLT Branch)

Arcos East DMCC

Antwerp Diamond Bank Asia Pacific Ltd (Branch)

RWE Supply & Trading GmbH

Petronas

Christie’s

PTT International Trading DMCC (Thai national oil company),

SCG Polymers

Vopak Middle East

Hakan

Lukoil

Itera

Trafigura Beheer

Sucden Middle East

Noble Resources Pte Ltd

LNG Impel

EcoSecurities Middle East DMCC

Dome International Petroleum

Cargill Middle East

Scan-Trans Shipping DMCC

Clarkson

Posco Steel & Alloys DMCC

Stemcor Mesa DMCC

Major companies in JLT

Almas tower

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FOCUS

Building safely

Build Safe UAE is a not-for- profit organisation aimed at improving the health, safety and welfare condi-

tions of all construction industry stakeholders through the free ex-change and sharing of information between organisations working in the UAE. By encouraging compa-nies to pool information it hopes to prevent accidents by raising aware-ness and communicating potential dangers and lessons learnt through-out the industry.

Build Safe UAE consists of a num-ber of major (international and local) developers, contractors, consultants, project managers and service or-ganisations of the UAE donstruction industry who have agreed to share their ‘Best Practice Safety Informa-tion’ in the forms of risk assessments, safe working methods, safety pre-sentations, safety alerts, tool box

talks, best practice case studies, etc. for the greater good of the whole industry in an effort to improve the general standard of health, safety and welfare across the UAE.

By sharing experiences the group hopes to demonstrate that accidents are preventable and that safety is ethically “the right thing to do” and business-wise “the smart thing to

do”.In 2008, Build Safe UAE recorded

eight out of 20 fatalities and 81 lost time injuries relating to falls from height. This number of fatalities & LTI’s indicates a huge scope for improvement. Unfortunately the causes for these types of incidents are not new to the industry and clearly more needs to be done. A considerable amount of these ac-cidents could have been prevented if the proper standards of practice were implemented.

Build Safe UAE recorded eight out of 20 fatalities and 81 lost time injuries relating to falls from height

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FOCUS

Improvise to excelIt is time for survival of the fittest and the cleverest at innovation

Landscaping work at Algeria Road

Eirik Kristensen

Abu Baker Shaikhani

Jotun Paints one of the world’s leading paint manu-facturers, in the Middle East since 1974 unveiled its new

website for the Middle East call-ing it ‘Lady’ (http://lady.jotun.com). The Lady was born due the com-pany’s online initiative that aims to enhance service levels for women customers in the region. She is the company’s interior paint brand, tar-geting modern day women, in the Middle East.

Designed as an interactive por-tal, the website provides users with advice on colour psychology and tips to decorate their homes and is inspired by the active role of wom-en in home decoration. Currently available in English and soon to be launched in Arabic, the website links to ‘Colour Advisor’, the com-pany’s revolutionary, easy-to-use online colour visualisation tool that lets users enjoy a more realistic ex-perience through the extended in-teractivity and accessibility to more colours, thereby enabling them to make better planning and painting decisions.

“In addition to the new website, we have also invested in events and seminars - including the ‘Lady Es-sentials’ workshop, as part of our commitment to raise awareness among women end-users in the region-the most recent being in partnership with the Dubai Ladies Club, focused on educating women on colour psychology, colour trends and painting techniques,” states Eirik Kristensen, Regional Marketing Manager - MENA, Jotun Paints.

In terms of the steel fabrications industry, Fabtech International

Limited, one of the largest and most technically advanced steel fabricators in the world, has posted 24 per cent growth in its revenue in 2008 despite difficult market condi-tions. “Our outstanding engineering capabilities and commitment to de-liver efficient solutions to our clients have helped us achieve double digit growth even this year when the industrial engineering sector is go-ing through a tough time,” says Dr. Harry Moreas, Chairman, Fabtech. Fabtech added one more feather to its portfolio of achievements, when in 2008 it built and delivered the world’s biggest Kangaroo crane to Qatar Petroleum. Established in 1995 in Jafza, in less than fourteen years of its operation, the company has seen more than 10, fold growth in its revenue and 20, fold growth in its facilities.

In the last thirteen years Fabtech has brought many firsts to the re-gion. It built the first high power oil rig in 1997. In 2005 Fabtech built

the largest oil rig in the world. In 2007 it built the first three dimen-sional bridge in the world for Abu Dhabi. Fabtech is currently engaged in number of innovative projects in aviation and other process industries and is confident of maintaining the pace of its growth in 2009 as well.

In the rubber industry, average price of rubber raw material prices have shot up by 15 per cent in 2009 as per Rubber World Industries (RWI), the leading manufacturer of closed-cell rubber insulation ‘Gulf-O-flex’ in the Gulf and South-East Asia. Amidst the upward movement of global prices, RWI, which accounts for 86 per cent of the Middle East rubber insulation market share, has committed to maintain its prices and

price. Rubber producers and export-ers have also decided to cut down output, which could translate to a 6.2 per cent drop in world rubber production in 2009 to hit 9.36 mil-lion tone. Amidst increasing global rubber raw materials prices, RWI maintains a positive outlook on the regional market taking pioneering efforts to enhance its processes and production capacity.

“Amid present challenges, we are strengthening our efforts to in-crease our production by 600 con-tainers to sufficiently address the need for rubber insulation products in the region,” said Abu Baker Shai-khani, Managing Director, Rubber World Industries, and Chairman of the Memon Group.

Eng Hussain Nasser Lootah, Di-rector, General of Dubai Munici-pality, reviewed the plantation projects of main roads in Dubai at a meeting with the Plantation Com-mittee of Dubai and its projects in-clude planting trees on various roads such as Bab Al Shams, Baghdad, Algeria, Tunis and Al Aweer Roads. Lootah also issued instructions to landscape Al Khawaneej Road and reviewed steps taken to implement greenery projects at road junctions, especially the Ras Al Khor and Wafi junctions. Following a presentation on landscaping projects in the Hatta area, Lootah stressed the impor-tance of beautifying and landscap-ing the city’s roundabouts using the latest aesthetic agricultural designs and issued directives to landscape the area surrounding the dump in Bayada and to set up a water tank to irrigate the trees and plants in the area.

ensure sufficient supply of rubber in-sulation products across the region, including pipes, sheets and other rubber-derived products. Also three of the largest rubber producers in Southeast Asia - Thailand, Malaysia and Indonesia, agreed to cut down their exports to push up the export

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According to business analysts, there is a strong demand for serviced of-fices amid the economic

downturn. Demand comes from new local companies, downsizing firms or overseas groups wanting to set up branch offices in Dubai. Serviced offices at the newly con-structed Reef Tower, located at DMCC, was inaugurated by Sheikh Ahmed Mohammed Zayed Saqer Al Nahyan in August. These offices will revolutionise real estate busi-ness in the future as they offer sev-eral added benefits compared to conventional offices.

As Sheikh Ahmed affirms, “ser-viced offices hold a huge potential for growth as companies seek to become more efficient and flexible in their use of space.

A recent report by Reuters con-firms that Dubai is the second most expensive office market in the Eu-rope, Middle East and Africa (EMEA) region. In such a scenario, serviced

R-serviced officesOffices that will revolutionise real estate businessBy Abhishek Chandra

offices are the most cost effective way to create an instant Dubai of-fice. The monthly rent for R-Ser-viced Offices ranges from Dh8000 to Dh10, 000 and includes a wide range of benefits such as use of

common areas like reception, busi-ness lounge, service areas and re-ceptionist services.

Ian Lloyd, Chief Executive of R-Serviced Offices, explains, “These offices are the perfect option for companies today as they look to reduce costs. It is a protracted and expensive process to search for office space, negotiate a lease agreement, purchase the office equipment and hire highly trained support staff. With R-Serviced Of-fices, companies can avoid exces-sive upfront expenses of opening an office, not tied to long leases and do not incur service charges. And save on furniture, fittings, staff-ing and monthly rent. In addition, it allows business owners to access

all of the benefits of being in the DMCC Free Zone.”

There is no additional service charge for air-conditioning, lighting, water, full-time security and electric-ity. The rent also includes dedicated local DID telephone and local fax number assigned to each worksta-tion, secure dedicated V LAN Seg-ment for each company’s exclusive use, CAT 6 Structured Ethernet con-nectivity and high-speed intelligent network switching and secure fire-wall functionality. Other attractions include: complimentary tea, coffee and water for clients and visitors, a dedicated post office box and mail sorting service, daily newspapers (English and Arabic), office mainte-nance and daily housekeeping.

Serviced offices hold a huge potential for growth as companies seek to become more efficient and flexible in their use of space

Sheikh Ahmed Mohammed Zayed Saqer Al Nahyan,

STOP WONDERING, START KNOWING

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STOP WONDERING, START KNOWING

45 per cent of Gulf projects are in UAEDubai-based developer reiterates support for the country's building industry

Forty-five per cent of projects planned in the Gulf, which have a total value of $930 billion, are currently under

construction in the UAE, according to recently published reports, thereby asserting the country’s leading posi-tion in terms of developments and project activity in the region. Forming part of the massive bulk of construc-tion projects in the UAE is the Dh1.34 billion project portfolio of Memon Investments among which there are high profile developments within sought-after communities, including luxury residential projects ‘Champi-ons Towers’ series, ‘Gardenia I & II’, and ‘Frankfurt Sports Tower I’; as well as its inaugural commercial tower - ‘Cam-bridge Business Centre’ (CBC).

The study further revealed that despite the economic slowdown, the value of property construction is four times higher than what had been es-timated in June 2005 and represents an annual growth rate of nearly 50

per cent. In addition, some 81 per cent of the UAE projects are in the construction sector, which indicate that the country has overtaken all GCC states in terms of total value of projects. Amidst ongoing pros-pects within the construction in-dustry, which is witnessing early signs of recovery, Memon Invest-ments is committed to the ongo-ing construction of its projects, encouraged by the relatively lower costs of construction, in an attempt

to ensure timely delivery and cus-tomer satisfaction.

“The strong standing of the UAE in the construction market is an in-dicator of the capacity of developers of locally-based projects to proceed with the construction of launched projects amidst the challenges pre-sented by the economic slump,” said Ahmed Shaikhani, Managing Director, Memon Investments. “As one of the leading players in the Dubai property market, we lever-

age our extensive industry expertise and strong financial backing, thereby enabling us to proceed with unhin-dered construction works on our flagship projects.”

Construction on the four towers under the ‘Champions Tower’ (CT) banner are progressing at an impres-sive pace, with various important contracts already been awarded to a number of top contractors, includ-ing leading MEP companies as well as companies that specialise in eleva-tor and air-conditioner installation. Moreover, construction of eight of the 10 floors within CBC has been completed, with initial steps already being made in preparation for the scheduled handover of the project to investors by the fourth quarter of 2009. The company also previously announced that it is fast-tracking the construction of ‘Gardenia I & II’ and ‘Frankfurt Sports Tower I’, in line with aims to hit their respective delivery deadlines.

23 Marina set to debut world-class show apartment

Hircon LLC unveiled its iconic residential project, 23 Marina’s first, fully-fit-ted show apartment on

September 30. Working with leading interior design specialists, Best Interi-ors and contemporary furniture spe-cialists, nuvo.

Speaking on the announcement, Manish Bhatia, Director of Sales and Marketing, Hircon International, said: “We have chosen the best-in-class partners to work with. Both nuvo and Best Interiors have the expertise to provide a world-class interior.”

Two types of show apartments were unveiled. A fully furnished 3-

bedroom apartment and a 2- bed-room unfurnished unit. The fur-nished apartment will be equipped with Smart Home technology, sup-plied by Crestron, the world’s re-nowned advanced home automa-tion system.

According to Alkesh Tandon, Owner, Best Interiors, “We are excit-ed with the opportunity to lend our expertise in designing the interior of the show apartment. The space, view and floor-to-ceiling windows provide us with an inspiring base to work from.”

nuvo will provide furniture care-fully selected and flown in from Italy.

Commenting on this, Girish Mahtani, General Manager, nuvo said: “We hope to create a sense of comfort-able living and warmth through the

combination of our con-temporary furniture and customised materials”

The 380-metre tall 23 Marina tower boasts 48 duplex apartments offering a new level of residential opulence. Each of these duplex apartments is located on the top 24 floors with its own private plunge pool with Jacuzzi and

internal elevator, setting a new hall-mark of excellence, with an area of around 5,782 square feet, each du-plex is a hanging villa.

UNDER CONSTRUCTION

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For more information dial +9714-2221112 Or mail us at info@rera.gov.ae

www.rpdubai.com

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HANDOVER

Le Grand Chateau ahead of 2010 deadlineDeveloper is first to deliver in Jumeirah Village

Al Fara’a Properties, a member of the Al Fara’a Construction, Property and Industrial Group, has

announced that the handover of units within its Dh225 million inau-gural residential development - ‘Le Grand Chateau’ (LGC) is complete, well ahead of the 2010 deadline set for the project’s delivery. The an-nouncement also coincides with the welcoming of the first batch of tenants moving into the high profile development, which is the first proj-ect to be completed in Jumeirah Village. As a testament to the devel-oper’s achievement in adopting top quality construction standards and in affirming the competitiveness of Dubai-based developments among other landmark projects across the Gulf region, LGC has bagged the ‘Best Development’ award at the CNBC Arabian Property Awards 2008.

Located at the heart of Jumeirah Village, Le Grand Chateau draws in-spiration from the architecture of the 16th century Chateaux of the Loire Valley in France. The develop-ment comprises 15 luxurious four-bedroom G+2 townhouses and a residential block with a combined total of 185 apartments. In addition to its impressive design, all aspects of the project - from furniture to lighting - have been carefully se-lected and blended to uphold the highest standards.

“We are thrilled to be the first developer to deliver a project in Jumeirah Village, ahead of our 2010 scheduled completion date,” said Dr JR Gangaramani, President and Executive Chairman, Al Fara’a Con-struction, Property and Industrial Group. ”Through maximising our ability to deliver world-class turn-

key solutions as a truly integrated construction group in the UAE, we believe that we have positioned ourselves as a real estate provider of choice to customers that seek solid investment solutions.”

In line with its commitment to provide excellent care to its inves-tors, the Al Fara’a Group has provid-ed LGC investors access to flexible financing options for the project through Abu Dhabi Commercial Bank (ADCB). Furthermore, the Group has also recently launched a facilities management division, which will help in optimising the costs of maintenance and ensur-ing the longevity of investments, whether it be through well main-tained facilities or stretching the maintenance pool fund as far as pos-sible. As an additional value-add, Al Fara’a Properties has partnered with Al Huzaifa Furniture to bring occu-pants a range of décor ideas cen-tered on classic Italian furniture in a contemporary modern setting. LGC tenants are also offered special rates on the leading furniture company’s latest collection and its turnkey in-terior design services such as design consultancy, concept designing and custom interior solutions.

“We are committed to exceed-ing the expectations of our clients throughout the value chain, wheth-er in terms of providing the right solutions for their needs or actively ensuring the sustained value of their investment. We remain steadfast in our belief that swift, efficient and timely handover of projects is as im-portant as the value of investment driven by construction quality and facilities offered. We will continue to apply these standards to The Man-hattan’, and ‘Mulberry Mansions’ projects in Jumeirah Village, and bolster the investments of our cli-ents through our recently launched facilities management division with-in the Al Fara’a Group, which will as-sume full responsibility for the care and security of the project to ensure the quality of the building is well maintained at the most acceptable cost and value,” concluded Natasha Gangaramani, Director, Al Fara’a Properties.

In addition to LGC, Al Fara’a Prop-erties has two other luxury residen-tial projects within Jumeirah Village - the ‘The Manhattan’, and the ‘Mul-berry Mansions’. Inspired by the ur-ban residences of 1930’s New York, ‘The Manhattan’ will offer 355 units,

Al Fara’a Construction, Property and Industrial GroupAl Fara’a Construction, Property and Industrial Group has a solid track record of three decades. It is a conglomerate of leading busi-ness entities including Al Fara’a General Contracting, Unibeton, Belgium Aluminium and Glass and Al Sabbah Electro Mechanical.

Unibeton is the market leader in ready mix concrete, and it re-cently created history by pouring a record 22,000 m3. of concrete in less than 35 hours at Al Attar Sky Spiral, Dubai. Belgium Aluminium and Glass is UAE’s largest service provider for the fabrication and installation of aluminium and glazed structures and decorative metal work.

Other business entities of Al Fara’a Group deal in contracting, precast, joinery, and steel struc-ture, covering the entire domain of the construction industry.

which comprise a selection of studio, one-, two-, and three-bed-rooms apartments; while ‘Mulberry Mansions’ will provide 12 Victorian-styled two-storey townhouses, incorporating four bedrooms, a private two-car garage, a terrace, a balcony, maid’s room with separate access, and a small private garden.

For more information dial +9714-2221112 Or mail us at info@rera.gov.ae

www.rpdubai.com

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INFRASTRUCTURE

Utilities consider unbundling to increase efficiencyA. T. Kearney reviews sector opportunities

A.T. Kearney, a leading management consulting firm, recently reviewed electricity regulation in

the Middle East and North Africa (MENA) and the discussions con-cerning unbundling, separating electricity supply from networks. Unbundling is expected to be a key facilitator for competition through discriminatory-free network access for third parties, and thus lead to efficiency gains. The A.T. Kearney re-view however, showed that in most cases the expectations towards unbundling are unrealistic and re-quirements of the regulators are not defined.

Electricity across the MENA re-gion is highly subsidised by the various governments at 30 to 50 per cent. In recent years however, these governments have looked for ways to lower those subsidies. Utilities companies have added surcharges to customer bills to manage the extra costs, as there were no other means of compensation or ways for improving efficiency.

“The defining element of an ownership unbundling model is

that the network of electricity trans-mission is operated and owned by one independent company, which clarifies the incentives, responsibili-ties and liabilities for the network, but unbundling does not necessar-ily mean lower tariffs”, said Dr. Dirk Buchta, Managing Director of A.T. Kearney Middle East.

National strategies on develop-ment of electricity markets in MENA vary considerably from country to country due to different national constraints. However, unbundling is

seen as one way of improving effi-ciencies without tariffs becoming so unrealistic that they might threaten the sustainability of the power grid.

“Unbundling the right way can provide significant opportunities for MENA countries”, said Dr. Goetz We-hberg, Leader of A.T. Kearney`s Utili-ties Practice in the Middle East.

Many regulators think of the United Kingdom as a role model for unbundling. Due to the ownership unbundling and demand regulation the electricity market in the UK is highly sophisticated in terms of pric-ing and customer fluctuation, with churn rates up to 15 per cent per year. However having the strongest competition does not necessarily mean a positive economic impact.

“The UK has suffered from its tough regulation. Shortages in generation capacity have led to an increasing number of outages in the past years. The fierce competi-tion has reduced the capitalisation of the utility companies. As a con-sequence, international companies were invited to take over. Last year for example, Electricité De France (EDF) acquired British Energy to help

invest in generation capacity such as new nuclear power plants,” com-mented Dr. Wehberg.

Examples from Europe and the US show that an appropriate regula-tion is of utmost importance when it comes to developing the utilities sec-tor and creating regional champions. Electricité De France (EDF) for exam-ple, has become a leader in nuclear energy in Europe over the past years. The company is sufficiently capital-ised to finance more than $60 billion for new nuclear plants over the next years and maintain safety standards at the highest level. EDF has gone through a moderate unbundling process, consolidating its transmis-sion network through its subsidiary Réseau de Transport d’Electricité (RTE).

“For MENA countries, we recom-mend a step-by-step unbundling process, because of the strong growth of electricity demand of three to six per cent annually. Regula-tors in MENA have to make sure that clear responsibilities for balancing supply and demand are maintained within the incumbent companies, despite of unbundling,” concluded Dr. Wehberg.

Omniyat has awarded the main construction contract to build The Gemini Tower to China

State Construction Engineering Corporation (CSCEC).

“Having recently celebrated the handover of our two premium de-velopments, Bayswater and The Square, we are delighted to move forward with yet another milestone and partner with CSCEC for the main construction of the Gemini,” said Mehdi Amjad, Chairman and

Omniyat awards main construction contract of Gemini TowerCEO of Omniyat Properties.

CSCEC is one of the world’s largest and most successful inter-national contractors. They have worked on many major projects around the globe receiving nu-merous awards for on-time deliv-ery of projects while also adher-ing to the most stringent quality standards.

Omniyat confirmed that the enabling work by Al Habtoor STFA Soil Group (HSSG) has been completed and the site has been

handed over. Planned and designed by ARCIF

Local German Joint Venture, The Gemini will house freehold offices, serviced offices, retail, a ‘Car Spa’ to provide basic car services, as well as a roof garden and fine din-ing restaurants set in a landscaped terrace overlooking the creek. It is easily accessible using any mode of transportation, by car, public trans-port with the Dubai Metro or even by water-taxi as the main jetty is only a few minutes away.

Dr. Goetz Wehberg

Gemini Tower

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INTERVIEW

Q. Aziz, tell me about your company, enTrust & Title? A. enTrust & Title is a neutral third party company that provides Escrow Set-

tlement & Title Conveyance Services. At the written instructions of both parties, whether it is buyer/seller or landlord/tenant, it ensures that all the elements including any missing facets of the transaction are performed as per the sales purchase agreement, MOU or rental contract. It elimi-nates complications and provides safety, security, speed and simplicity in facilitating closing for all the participants in a transaction.

Q. What does neutral third party mean? Do you represent the buyers or the sellers or the landlord or the tenant?

A. Our company takes instructions that buyers/sellers & tenants /landlords have agreed upon and we ensure that those instructions are complied with. By not just representing one party, we minimise any risks of dis-putes, loss of deposits, unnecessary accumulation of interest on loans and any surprises related to fees and commissions. We provide full ac-counting of funds received in escrow and its disbursements with the approval of principals in the transaction. If a dispute arises during the transaction, the parties must come to a new agreement so neither party believes they have an upper hand.

Q. How does using an escrow help in real estate transactions?A. When a client decides to employ our services, the earnest money depos-

it, transfer fees, commissions and funds to complete the transaction are held in our insured escrow account. This avoids an unscrupulous party

Conveyancing services

Carla Polkinhorn, Counsel & Senior EnTrustee asked her boss, CEO and Founder Aziz Valliani, about the company and its future plans.

running away with the funds. Only upon the successful transfer of the property from the seller to the buyer are the escrowed funds released to the seller. Or in the case of rental transactions, after checking the owner-ship and the authority of the management company, the funds are re-leased to the landlord and post-dated cheques are held and deposited when rent is due. We can issue payments to necessary parties, track the rent and home owner’s pro-rations, security deposit transfers, attorney fees, developer and lender fees etc.

Q. What are the main benefits of using enTrust & Title?A. Many brokers, agents and attorneys refer their clients to us routinely as

our officer are experienced with time consuming day-to-day practices

We use state-of-the-art technology which includes accounting engine to expedite transactions, and we biometrically validate the identity of the parties in the transaction

Aziz Valliani, CEO & Founder, EnTrust

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of buying /selling or renting residential or commercial property in Dubai. We use state-of- the-art technology which includes accounting engine to expedite transactions, and we biometrically validate the identity of the parties in the transaction. These benefits are extremely important to busy attorneys and real estate agents and brokers. They have found our service a necessary one to secure transactions that would otherwise not happen, be very expensive or consume too much of their time away from what they do best. This burden is unloaded once we step in and monitor the transaction on behalf of all the parties until successful completion. Our company becomes an intermediary overseeing the property transfer and we ensure that best practices are followed throughout every step of the transaction.

Q. Can you give me an example of how a deal was saved by using your Escrow Settlement and Title Conveyance service?

A. There have been cases in which a buyer is asked to pay off the seller’s existing loan. The buyer in some instances has to release funds directly to the seller’s account in order for him to pay off the existing loan. The buyer does not take title to the property until after the payoff is made. In these situations, many buyers refuse to allow their funds to be under the sellers, control thus the deals fall through and never happens.

Q. How does your company validate the identities of the parties? A. We authenticate fingerprint, signature and photograph of the principals

in the transaction and gather appropriate identification which is then en-crypted and stored in what we call an enTrusted Token and it can only be unlocked if the same principal is present to do so. This safekeeping of the parties’ identities is extremely important. Not only do we make sure that we are dealing with the proper parties in a transactions, we ensure that

being sold and buyers with funding requirements for their new loans. The buyer’s lender can fund directly to the escrow account only when the transaction is about to close and we are sure that we can secure the lender’s collateral. We provide complete transparency of all accounting and disbursement statements to lenders, buyers and sellers. We also se-cure the registration of the mortgage at the transfer of the property to the new buyer. enTrust & Title becomes the central point or the hub for the transaction because we work for all parties, not just one. We ensure that we have all the information and that no details are missed.

Q. How are your services different than from of brokers?A. Brokers are supposed to represent a buyer or the seller, and sometimes

both. But in the end, the broker is interested in closing the deal and col-lecting his commission. Therefore, brokers are not neutral intermediaries in a deal. If they are representing both parties, they have agreements signed by each party separately. Our escrow instructions require both parties to give us joint and mutually agreed upon direction detailing all the terms and conditions that they want us to execute on their behalf prior to the closing.

Q. Do you work with the brokers and what benefits do they get from pre-scribing to your services?

A. We work with brokers, agents and attorneys all the time. We help them expedite their sales cycle, take away the painstaking process of complet-ing the transaction and create time for them to do what they do best, i.e. match buyers with sellers and landlords with tenants. Brokers are able to hand over the leg work involved with closing a transaction once an MOU is signed by buyer and seller. We control and manage the funds, documentation and most importantly for the brokers, ensure that their

Q. How does using an escrow help in real estate transactions?A. When a client decides to employ our services, the earnest money deposit, transfer fees,

commissions and funds to complete the transaction are held in our insured escrow account. This avoids an unscrupulous party running away with the funds. Only upon the successful

transfer of the property from the seller to the buyer are the escrowed funds released to the seller. Or in the case of rental transactions, after checking the ownership and the authority of the management company, the funds are released to the landlord and post dated cheques are held and deposited when rent is due. We can issue payments to necessary parties, track the rent and home owner’s pro-rations, security deposit transfers, attorney fees, developer and lender fees etc

their identities are safe and their privacy is not compromised

Q. Do you have any competition in Dubai? A. Not to my knowledge. We are pioneering the first independent Escrow

Services Company in Dubai which is truly a neutral third party.

Q. How can the parties trust that their funds will be safe with your com-pany?

A. Besides providing the clients with an evidence of insurance of funds, our company is licensed by RERA and the Dubai Land Department.

Q. Do you help or work with lenders in any way?A. Actually yes. Lenders or financial institutions benefit greatly from our ser-

vices as we assist sellers with paying off outstanding loans on properties

commission is paid as per the terms of SPA, MOU or the rental contract.

Q. How do you market enTrust & Title?A. Currently, enTrust & Title services are marketed through its network of

brokers, agents, attorneys and lenders who have experienced the value we provide to our mutual clients, i.e. buyers, sellers, tenants, landlords and management companies. Financial advisors also rave at the benefits derived by using our services to their clients.

Q. There are many foreigners who have invested in UAE? how do they benefit from your services?

A. enTrust & Title has the capability to close transactions without the par-ties having to travel to Dubai. Parties can be validated, funds transferred and documents delivered electronically. enTrust & Title’s Certified en-

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Trusted Witness Programme allows parties to execute documents from anywhere in the world and check the status of the transaction, be it a sale or rental.

Q. What is Certified enTrusted Witness Programme? A. The Certified enTrusted Programme, also known as the CeW, is a world-

wide network of people with pristine reputation. The programme quali-fies trains and certifies individuals of good standing in the community they reside to serve as the witness to a transaction. These individuals can then market themselves as Certified enTrusted Witnesses. The seller/buyer or landlord/tenant who wish to utilize services of enTrust & Title may execute their documents from anywhere in the world by showing

signing authorities must be validated, terms and conditions of the tenancy contract or commercial lease must be properly documented and complied with. Tenant’s cheques can be held, payments can be made on behalf of landlords who are out of the country and tenancy contracts can be reg-istered. The company has efficient, simple and cost-effective solutions to ensure no landlord or tenant is put at risk in a transaction.

Q. How long did it take you to set up enTrust & Title in UAE?A. The entire process took two long years. We had to ensure that we met

all regulatory issues, all our documents complied with the local rules and regulations, and that all best practices were incorporated when creating local practices and procedures for Escrow in Dubai.

identification, and submitting their legal documents to an enTrusted Wit-ness nearest to them. The enTrusted Witness would then biometrically endorse them and submit the order electronically.

Q. Already the cost of real property transaction is very high. Who pays for your services and how much is it?

A. Real property investment for most people is the largest investment one makes in their life time. Considering that, the cost for our services is ac-tually fairly minimal and can be paid by either party individually or split between the parties as agreed upon.

Q. Is Escrow service used anywhere else in the world?A. Escrow is a 150-year-old industry, originating in North America and now is

being used widely in many countries, all across the globe.

Q. How is the Escrow and conveyance system different here?A. Escrow is a neutral third party that is instructed as to how to proceed with

closing a transaction while conveyancing is the legal term for transfer-ring property. Here in UAE, we provide both services without having to employ expensive services of a solicitor.

Q. How did you find resources here in Dubai who have the skill sets to pro-vide Escrow services in UAE?

A. Our management team is from California, USA. We train those in the legal and real estate field on the escrow best practices after conducting a full background check on them.

Q. How can people get in touch with your office?A. We are located at Dubai Internet City (DIC) Bldg # 16, Suite 236, Dubai,

UAE, Tel # 971 04 434 5730 and email is info@entrusttitle.com. You can visit www.entrusttitle.com for more information as well.

Q. Why would your services be needed for rental contract?A. In a rental transaction the ownership of the property needs to verified,

Q. What is your definition of best practices and transparency? How is it applied?

A. In response to the challenges of the real estate market, the company’s pro-cess offers balanced protection to the buyer, seller, landlord and tenants. The issues of legal ownership, authority to enter into contract, registration of deed, misrepresentation, financial disclosures, and non-availability of documents in time for a resale, are resolved when using the company’s enTrusted Escrow Services. The company’s proprietary state-of-the-art technology such as digital biometric authentication of all principals miti-gates financial risks to the buyer, tenant or the lender. The company stands behind its quality of service by offering limited and renewable guarantees to ensure proper and complete transfer of title at the close of transaction.

Q. Can your records be audited? How can people be assured that you have proper internal controls?

A. We use time tested and multi-state approved software that balances the trust account down to the fil at any given time. The company self audits itself routinely in accordance with Generally Acceptable Accounting Prin-ciples (GAAP) and is open to audit by the authorities at any time.

Q. What is your Escrow settlement process? A. The Escrow settlement process involves inputting a formal agreement

from the parties (MOU or sale and purchase contract (or tenancy con-tract if rental)) and their closing instructions into the enTrust & Title Enter-prise System (enTTS) online. The company requires certain information from the parties to ensure that all the checks and balances in their clos-ing are in place and that there exists transparency throughout the trans-action. Once all data is gathered the terms of the transaction are noted and calendared and the closing process begins. Once formal terms are complied with (i.e. buyers loan funds, sellers existing loan is paid off, etc) the final formalities with the transfer of the property are complied with (i.e. Deed Certificate is Registered into the buyers name, rents are pro-rated, leases assigned) and a final accounting is provided to all parties to the transaction.

Q. How long did it take you to set up enTrust & Title in UAE?A. The entire process took two long years. We had to ensure that we met all regulatory issues, all our

documents complied with the local rules and regulations, and that all best practices were incorporated when creating local practices and procedures for Escrow in Dubai.

2 Legal Business February 2009

2 Legal Business February 2009

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As a result of the global economic slowdown there has been much speculation over delays

in delivery of projects or cancella-tion of projects in Dubai. Some commentators have estimated that more than half of the construction projects in the UAE have been put on hold and that around 25 per cent of real estate projects in Dubai would be cancelled.

Procedure for Cancellation of a Project Law No. 9 of 2009 Amending the Interim Real Estate Register Law (‘Law 9’) provides that RERA can cancel a project "based on a report grounded with reasons". This pow-er appears to be extremely broad but until the executive regulations to accompany Law 9 are issued, there are no clear guidelines and procedures setting out when or how a project will be cancelled by RERA.

Escrow AccountIf a project is to be cancelled the developer should return all pay-ments received from the purchas-ers in accordance with the proce-dures and provisions stipulated in Law No. 8 of 2007 concerning escrow accounts for property de-velopment in the Emirate of Dubai

Cancellation of projectsBy Patricia Wardrop and Helen Hangari, DLA Piper

(‘Escrow Law’). The Escrow Law provides that if

a real estate project is cancelled or delayed, the Escrow Account Trust-ee of such project must take all req-uisite steps in order to maintain the rights of purchasers so as to ensure either the completion of the real estate project, or, the refund of all amounts paid by the purchasers.

In practice, it is not necessar-ily the case that all the purchasers' monies will be protected in an es-crow account. For example, the developer may not have been re-quired to maintain such an account or some of the funds may have been utilised to cover land acquisi-tion, consultant's fees and sale and marketing costs. If construction has commenced, then it is unlikely that there will be sufficient funds in the escrow account to return all mon-

ies paid by purchasers as the devel-oper is likely to have drawn down funds in accordance with certain construction milestones being met. However, if there are funds in an escrow account the developer is prohibited by the Escrow Law from applying these to any other real es-tate projects.

Termination of off-plan pur-chase agreements For the cancellation of any real es-tate projects, all off-plan purchase agreements have to be cancelled. This can be instigated by the de-veloper pursuant to Law 9 if a pur-chaser is in default. In these circum-stances the developer must first notify the Land Department of the breach. The Land Department will then give the purchaser 30 days no-tice to rectify the breach. If the pur-chaser does not remedy the breach within this period then the amount of monies that will be refunded to the purchaser will depend on the stage of completion of a project at the time of cancellation. This can vary from the developer being re-quired to refund all monies paid to it by purchasers to the developer being entitled to retain all monies received from purchasers and re-cover any shortfall if the developer has completed 80 per cent or more of the construction of the project.

Projects 'On Hold'Law 9 does not expressly give pur-chasers the power to terminate their off-plan purchase contracts. Pur-chasers are entitled to lodge com-plaints at RERA and we also hope that the executive regulations to accompany Law 9 will clarify what steps a purchaser can take if a proj-ect it has invested in does not seem to be progressing.

RERA has taken steps to increase the information available to purchas-ers with regards to the progress of projects. The RERA website now contains monthly progress reports for over 875 projects in Dubai. New investors to Dubai will also benefit from such information being public-ly available and for purchasers who have already invested in Dubai, they will be able to continuously review the progress of their investments.

So far, whilst many projects are on hold, we understand that very few projects have actually been can-celled and this is understandable given the complexities of 'undoing' a vast number of contractual arrange-ments that will be in place in relation to every project. At the moment it is not clear how long a project can simply be 'on hold' for before steps can be taken to cancel the project but we hope that the executive reg-ulations will clarify this to protect all parties.

Patricia Wardrop

LEGALLY SPEAKING

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cent of the project, the develop-er may terminate the SPA and re-tain 40 per cent of the purchase price.

3. If the developer has commenced construction of the project but has not completed 60 per cent, the developer may terminate the SPA and retain 25 per cent of the purchase price.

4. If construction of the project has not yet commenced for reasons beyond the developer’s control, without any negligence or omis-sion on the developer’s part, the developer may terminate the SPA and retain 30 per cent of all monies paid by the purchaser. Commencement of ‘construc-

tion’ is defined in Law Number 9 of 2009 as handover of the site by the developer to a contractor and com-

In these days, that are based on more realistic valuations, there are significant and lucrative op-portunities for both develop-

ers and purchasers. Those who are equipped with an in-depth knowl-edge of both the new market con-ditions and the new real estate laws will be best placed to take advan-tage of these opportunities.

Some developers may still dream of the days before the credit crunch when they could take a more ag-gressive attitude to negotiations with purchasers, giving little ground. However, these days developers are likely to find purchasers far easier to attract if they demonstrate flexibility and creativity.

Purchasers are increasingly aware of the bargaining strength they in-herited from the credit crunch, fo-cusing not only on having unit prices reduced, but also seeking changes in the unit sale and purchase agree-ment (“SPA”), (a document that was previously sacrosanct and to which revisions were generally not permit-ted).

Law Number 13 of 2008 and Law Number 9 of 2009Two real estate laws of particular im-portance in relation to the SPA are

The revival of the Dubai property marketDubai’s real estate market has experienced some heavy turbulence since late summer 2008. However, there are signs that the market has stabilised and that green shoots of recovery are emerging.

LEGALLY SPEAKING

By Shahram Safai

Dubai Law Number 13 of 2008 and Dubai Law Number 9 of 2009.

These laws govern the develop-er’s right to terminate the SPA in the event that the purchaser falls into default, and they stipulate (i) a ter-

mination procedure to be followed and (ii) the monies that may be re-tained by the developer in the event of termination.

In general, pursuant to Law Num-ber 13 and Law Number 9 the great-er the completion of the project, the more monies that the developer may retain. 1. If the developer has completed

at least 80 per cent of the proj-ect, the developer may retain all monies paid and may request that the purchaser settle the out-standing portion of the purchase price. If the purchaser fails to pay, then the developer may request that the property be auctioned in order to recover the outstand-ing monies.

2. If the developer has completed construction of at least 60 per

Purchasers are increasingly aware of the bargaining strength they inherited from the credit crunch, focusing not only on having unit prices reduced, but also seeking changes in the unit sale and purchase agreement (“SPA”), (a document that was previously sacrosanct and to which revisions were generally not permitted)

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mencement of construction works in accordance with designs approved by appropriate authorities.

For the purposes of paragraphs 1, 2 and 3 above, the developer must return any monies due to the pur-chaser within the earlier of (i) one year from the date of cancellation or (ii) 60 days from the date of a resale of the property by the developer.

Delays in completionWhilst the developer will be focused on receiving payment of the pur-chase price, the purchaser’s eyes will be on when the completed unit is to be handed-over to him. The pur-chaser will want some comfort that the SPA is not committing him to purchase a unit with no foreseeable construction completion date. On the other hand, developers all across the world, not simply in Dubai, have experienced difficulties and delays due to the credit crunch.

The above competing interests are frequently addressed in the SPA by (i) the provision of an ‘anticipated’ date of completion, with the de-veloper retaining some freedom to push the date backwards if events do delay construction and (ii) the inclusion of a date beyond which, if the unit is not complete, the pur-chaser has the option of terminat-ing the SPA and having his monies returned to him.

Unit specificationsAt times, the developer does not complete a unit that exactly match-es the dimensions detailed in the SPA for a variety of reasons. On the other hand, the purchaser must have some certainty as to the size of the unit. The common resolution is for the SPA to state that the as-built area of the unit must be within a specific percentage of the area as stated in the SPA (generally 3-5 per cent).

Linked with this, Law Number 13 of 2008 provides that if the as-built area exceeds the area mentioned in the SPA, the developer is not per-mitted to increase the price as a result. To help avoid any confusion, the purchaser would be advised to ensure that there is no contradic-tory wording in the SPA.

On a similar topic, the purchaser

should review the SPA to estab-lish the freedom retained by the developer to replace finishes and materials in the unit in the event that the stated finishes and mate-rials become unavailable. The SPA should state that any replacement finishes and materials should be of the same or better quality.

Sales brochuresWhen marketing projects, develop-ers will often use artist’s impressions

of how the finished project will look. This is another area where purchasers ought to beware. The SPA will generally state that the description of the unit in the SPA is the only description that is le-gally binding. Any descriptions, sales brochures or plans that were given to the purchaser prior to the SPA being signed are there-fore irrelevant.

Payment planWhilst not law, RERA issued recom-mendations in early 2009 to the ef-fect that developers should revise their payment schedules such that payments fall due on completion of construction milestones and that no more than 30 per cent of the purchase price should be col-lected prior to construction com-mencing. To attract purchasers, some developers offer such pay-

ment plans as a matter of course without the purchaser requesting it.

Looking to the futureEven with the strong negotiating position now enjoyed by purchas-ers, there remain a myriad of SPA clauses that may become legal pit-falls for even the most experienced of purchasers. As a result, the SPA

should be carefully reviewed be-fore being signed. For their part, in the rush to sell units and ease cash flow, developers must be wary not to concede issues that may seem irrelevant in the early days of a project, but may cause severe dif-ficulty for them at a later stage.

With the real estate market rising again, developers and pur-chasers should pay careful atten-tion to the details of their dealings to ensure that each receives what she or he expects.

About the AuthorShahram Safai is a lawyer, profes-sional engineer and a partner at the law firm of Afridi & Angel, Level 35, Emirates Towers, Dubai, United Arab Emirates. Tel: (+9714) 330 3900;

Fax: (+9714) 330 3800. Email: ssafai@afridi-angell.com.

* The above information is not legal advice and is neither intended to cre-ate nor creates a lawyer-client rela-tionship. Neither the writer nor Afridi & Angell are responsible for anyone rely-ing on the above information. You are recommended to obtain independent legal advice.

The purchaser will want some comfort that the SPA is not committing him to purchase a unit with no foreseeable construction completion date

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LAW NO (7) of 2006 CONCERNING REAL PROPERTY REGISTRATION IN THE EMIRATE OF DUBAIWe, Mohammad Bin Rashid Al Maktoum, Ruler of Dubai:Upon cognizance of the Federal Law No. 5 of 1985 issuing the Civil TransactionsLaw, as amended,The Federal Law No. 11 of 1992 issuing the Civil Procedures Law, as amended,The local Law No. 7 of 1997 concerning the charges for the registration of lands,And the local Decree of 1960 concerning the formation of the Lands Committee,Have issued the following Law:

Chapter (1) Name and DefinitionsArticle (1) This Law shall be called the “Law No. (7) of 2006 concerning Real PropertyRegistration in the Emirate of Dubai”.

Article (2) Unless the context requires otherwise, the following terms and expressions in this Law shall have the meanings as shown against them respectively:“State” means United Arab Emirates;“Emirate” means the Emirate of Dubai;“Government” means the Government of Dubai, including any of its departments, authorities or public establishments;“Ruler” means H. H. the Ruler of the Emirate of Dubai;“Department” means the Department of Lands and Properties;“Chairman” means the Chairman of the Department;“Manager” means the General Manager of the Department;“Real Property” means anything immovable fixed within its boundaries which cannot be moved without damaging or changing its features;“Real Property Rights” means any right in rem, whether principal or collateral, over a Real Property;“Real Property Register” means a set of documents held in written or electronic format in the electronic register at the Department, which point out the description and location of each Real Property and the rights attached thereto;“Real Property Unit” means any plot of land and any constructions, plants and other things thereon located in a single Real Property Area without any part thereof being separated from the other parts by any public or private property and without having any rights or liabilities on any part thereof other than therights and liabilities of the other parts;“Real Property Area” means a group of Real Property Units identified by main streets or fixed and clear landmarks, bearing an approved name and independent serial number in accordance with the regulations applied by the Department;“Person” means a natural or legal person.

LAWS & REGULATIONS//UPDATES

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Law No. (7) of 2006

Chapter (2) Scope of Application and Right to Hold TitleArticle (3)The provisions of this Law shall apply to the Real Properties in the Emirate.

Article (4)The right to own Real Property in the Emirate shall be restricted to UAE and GCC nationals and to companies owned in full by them and to public joint stock companies. Subject to the Ruler’s approval and in specific areas in the Emirate as determined by him, non-national persons may be granted the following rights:A. The right to freehold ownership without time restrictions; orB. Usufruct right or leasehold right over a Real Property for a period not exceeding 99 years.

Chapter (3) General ProvisionsArticle (5) The original documents and judgments under which registrations are made shall be maintained at the Department, and removing them outside the Department is prohibited.Any party having an interest, the judicial authorities or any experts appointed by them and the competent committees may inspect the documents maintained in the Register and obtain a certified copy of them in accordance with the provisions of this Law.

Chapter (4) Competence of the DepartmentArticle (6) The Department shall solely, to the exclusion of others, be authorized to register the Real Property Rights and long term leases as provided under Article 4 hereof. For this purpose, the Department shall undertake the following:1. determine areas for survey or re- survey and approve maps prepared thereof;2. determine the rules in connection with the survey, inspection and issue of maps related to Real Property Units;3. prepare standard contracts in relation to Real Property transactions;4. lay down the rules in connection with organising, maintaining and destroying documents;5. lay down the rules in connection with the use of computers for saving and registering data;6. lay down the rules in connection with regulating and maintaining a register for real estate brokers;7. lay down the rules in connection with the evaluation of Real Properties;8. lay down the rules in connection with the sale of a Real Property at optional public auction and the supervision thereof;9. determine the charges payable for services provided by the Department; and10. establish branches for the Department as the Manager may deem fit.

Chapter (5) Real Property RegisterArticle (7) A Real Property Register shall be established at the Department. All Real Property Rights and any amendments thereon shall be registered in the Register, which shall have absolute power of evidence against all parties. No objections against the data of the Register may be made other than on the grounds of fraud or forgery.

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Article (8) Subject to the provisions of Article 7 hereof, documents and instruments of the Real Property Register registered electronically in a computer shall be acceptable for the purpose of evidence as original documents and instruments.

Chapter (6) RegistrationArticle (9) All dispositions that may create, transfer, vary or terminate a Real Property Right and all final judgments confirming any such dispositions shall be registered in the Real Property Register. Such dispositions shall not be valid unless they are registered in the Real Property Register.

Article (10) The liability for breaching an undertaking to transfer any Real Property Right shall be limited to payment of indemnity, whether or not such undertaking provides for an indemnity.

Article (11) Any inheritance declaration shall be registered in the Real Property Register if the inheritance includes Real Property Rights. No dispositions by any heir in connection with any such rights shall be valid or effective against third parties unless such dispositions are registered in the Real Property Register.

Article (12) The Department may, in accordance with procedures to be issued under a resolution by the Chairman of the Department, consider applications for registration submitted by holders of lands that are not registered in their names in order to settle the position of such lands.

Chapter (7) Alteration or Correction of Data in the Real Property RegisterArticle (13) The Department may correct purely material errors in the folios of the Real Property Register upon a request from an interested party or on its own initiative and shall inform the concerned parties of such corrections.

Article (14) The Department shall, in coordination with the relevant authorities, update the data in relation to Real Property Units together with the buildings, plantations or other structures thereon.

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Law No. (7) of 2006

Chapter (8) MapsArticle (15) 1. Upon the registration of the Real Property Areas and Units in the Real Property Register, the following maps shall be relied upon: (a) The base topographic map; (b) The Real Property Unit map; (c) The Real Property Area map.2. Every Real Property Area shall have a separate map showing the Real Property Units in that area together with their numbers.3. Every Real Property Unit shall have a separate map indicating its location, boundaries, dimensions, area, features and the structures thereon together with the numbers of the adjacent units.

Chapter (9) Division and MergerArticle (16) If a dominant Real Property Unit is divided, the easement right shall persist for each part of the Unit, provided that such division shall not increase the burden on the servient Real Property Unit. However, if the easement is actually beneficial to only one of those parts, the owner of the servient Real Property Unit may apply to the Department to terminate the easement right of the other parts.

Article (17) If a servient Real Property Unit is divided, the easement right shall persist on each part of the Unit. However, if the easement is actually used on some parts or cannot be used thereon, the owner of each part thereof may apply to the Department in accordance with the provisions of this Law to terminate the easement right on the part owned by him.

Article (18) Easement rights shall terminate if the servient Real Property Unit and the dominant Real Property Unit become under the possession of a single owner.

Article (19) If a Real Property Unit burdened with a collateral right in rem is divided to two or more Real Property Units, each new Real Property Unit shall bear the right in full.The new owners and the holder of the collateral right in rem may agree to divide such right so that each of the new Real Property Units will bear only part thereof as agreed.

Article (20) If two Real Property Units are merged, where one of them is burdened with a collateral right in rem and the other unit is free of such right, the collateral right in rem shall extend to the new Real Property Unit in full without the consent of the holder of the right to merger.However, if each of the Units is burdened with a separate collateral right in rem, the consent of the holders of such rights to the merger shall be obtained prior to such merger.

Article (21) Any amendment of merger or division on the Real Property Unit shall be registeredin the Real Property Register.

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Law No. (7) of 2006

Chapter (10) Title DeedsArticle (22) The Department shall issue title deeds of Real Property Rights in accordance with the current records in the Real Property Register.

Article (23) Subject to the provisions of any other law, a multi floor or apartment Real Property shall be considered as a single Real Property Unit and a folio shall be designated thereto in the Real Property Register. Supplementary folios in the names of the owners of such apartments and floors and common areas shall be added to the original folio.

Article (24) 1. Title deeds referred to under Article (22) of this Law shall have absolute power of evidence to establish Real Property Rights.

2. Any conditions, undertakings, encumbrances or any other liabilities related to Real Property Rights shall be stated in the designated folio of the Real Property Unit.

Chapter (11) Final ProvisionsArticle (25) The provisions of the Federal Civil Procedures Law No. 5 of 1985, as amended, shall apply to anything not provided for in this Law.

Article (26) 1. Any agreement or disposal made in violation to the provisions of this Law or with the intent to circumvent its provisions shall be null and void.2. Any party having interest or the Department or the Public Prosecution may demand to invalidate such agreement or disposal and the courts shall rule as such on its own initiative.

Article (27) The Decree dated 6 November 1977 concerning civil and criminal cases relating to land transactions in the Emirate of Dubai is repealed.

Article (28) The Chairman shall issue the required regulations, orders and instructions for theenforcement of the provisions of this Law.

Article (29) This Law shall be published in the Official Gazette and shall come in force as of the date of its publication.(signed)

Mohammad Bin Khalifa Al Maktoum Ruler of DubaiIssued in Dubai on 13 March 2006

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